SIEMENS beat quarterly earnings forecasts on Thursday (Aug 8), helped by demand for electricity infrastructure and production software, but warned some customers were hesitant to invest amid uncertainty over borrowing costs.
The technology group reported an 11 per cent increase in adjusted operating profit to three billion euros (S$4.3 billion) for April-to-June quarter, its fiscal third-quarter, beating analysts’ average forecast of 2.84 billion euros in a poll on the group’s website.
The German maker of trains and factory equipment kept its guidance for its full financial year to end-September, saying a wave of new customers for its software for microchip production and product design were a one-off boost in the quarter.
At the same time, it warned that clients remained hesitant to invest in factory automation, and that central banks had yet to provide much-needed certainty over borrowing costs.
Chinese customers and distributors, in particular, were only slowly returning to buying new gear while still drawing on their stockpiles, the company said.
It added there were signs of a recovery in demand from chemical makers, seen as an early business-cycle indicator.
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“We are seeing very tender signs of a recovery in some parameters but that’s far too early to proclaim summer from this swallow,” chief executive Roland Busch told a media call.
Siemens’ shares were down 0.4 per cent at 0815 GMT.
Industry demand in the company’s home region has been weak with a key index of eurozone manufacturing hitting a seven-month low in July.
Full-year revenue growth is still seen at the lower end of a four-8 per cent range, adjusted for currency swings, acquisitions and divestments, Siemens said.
It added that profit margins at its Digital Industries unit, which makes software and equipment for process automation, would be at the lower end of its target range, but would be at the upper end at its Smart Infrastructure unit, which makes systems for ventilation, power wiring and security at large facilities.
Siemens said late on Wednesday that it aimed to speed up the transition to a technology-focused enterprise by expanding its management board to seven members from five. REUTERS
