German industrial giant Siemens announced on Thursday that its quarterly profit rose sharply, citing demand for production software in addition to the “boom” in artificial intelligence and customers’ modernization of power grids.
Net cash in on April to June was 1.98 billion euros (2.2 billion dollars) – around 50 percent greater than the previous yr and better than analysts had forecast – on sales of 18.9 billion euros.
Siemens, whose sprawling global business ranges from making trains and factory equipment to data center management systems, said its software business delivered strong results and landed quite a few necessary orders.
The group’s electrification division also grew by greater than 20 percent, said CEO Roland Busch.
“We are benefiting from the boom in artificial intelligence and the accelerated energy transition,” he told journalists after the publication of the outcomes.
“On the one hand, many new data centers are being built, and on the other hand, the power grids are being expanded to accommodate more renewable energy.”
The group’s “Smart Infrastructure” division, which also includes the electrification business, reported a complete increase in sales of 10 percent in comparison with the previous yr.
However, sales within the Industrial Automation division, which incorporates factory automation, declined.
Compared to the identical quarter in 2023, overall orders fell by 16 percent, despite a record variety of train orders during this era.
In the “Mobility” sector, which also includes the rail business, orders fell by 70 percent.
The Munich-based group reiterated its outlook of achieving sales growth of 4 to eight percent within the 2024 financial yr, which runs until the top of September.
However, it was identified that the end result would probably be on the lower end of this range. Busch said that “the economic situation in China and Europe remains difficult.”
“Recent macro indicators suggest that conditions for industrial demand remain difficult,” he added.
In the important thing market of China, demand stays “subdued,” Siemens said.
Following the announcement of the outcomes, the group’s share price lost about half a percentage point on the Frankfurt Stock Exchange.
Siemens has long been a producer of heavy industrial equipment, but lately it has sought to shift its focus toward digital technology and factory automation.
