Siemens has reported a drop in second-quarter earnings at its industrial business, the German engineering group said today, after a slowdown at its flagship factory automation division.
The trains to industrial software maker said industrial profit fell 2% to €2.51 billion in the three months to the end of March. That missed an average analyst forecast for €2.68 billion in a company-gathered consensus.
Sales fell 1% to €19.16 billion, below the €19.28 billion expected, while net profit fell to €2.19 billion.
Digital Industries - the company's factory software and automation division - struggled with lower orders, sales and profit during the period, the company said.
In contrast, Siemens's buildings and transport division both posted increases in revenues.
"Siemens proved its resilience with strong revenue performance in Smart Infrastructure, Mobility and industrial software; this nearly offset currently muted demand in Digital Industries' automation business," chief executive Roland Busch said in a statement.
Siemens, which warned in March that revenues at digital industries would be lower, said the market environment had been "challenging."
Digital Industries' orders fell 14% during the quarter while sales were 13% down, as customers preferred to run through their existing stocks of industrial controllers, rather than buying new ones.
China was flagged as being particularly weak, with lower orders and revenues, while Europe also struggled.
Profit at the division fell sharply as Siemens sold fewer of its higher-margin products, and utilised its own factories less.
Siemens said it now expected the destocking trend to continue into the second half of 2024, and reduced its sales outlook for digital industries.
But the company still confirmed its outlook for annual sales at group level to increase by 4%-8%, helped by a slightly stronger growth at its Smart Infrastructure business.
