ZURICH (Reuters) – Siemens is seeing a “normalization of demand”, particularly in China, the German engineering group said on Thursday, as it reported third-quarter profit below expectations.
The maker of trains and automation systems recorded industrial profit down 4% to 2.75 billion euros for the three months to the end of June, while analysts had expected 2.90 billion euros according to a consensus provided by society.
The title fell 2.7% in pre-market trading, the largest decline among Dax companies in Frankfurt.
“We have seen a normalization of demand, particularly in China and in short-cycle businesses,” CEO Roland Busch said in a statement.
Digital industries order intake fell 37% in the quarter, particularly in short-cycle factory automation, Siemens said.
The situation of Siemens, whose products are used to automate factories and equip transport networks, gives a glimpse of the health of the global economy.
Manufacturing activity has slowed in recent months due to a weakening in Europe and China, but the situation needs to be qualified, with orders on the rise in German industry, which is nevertheless weakened.
Siemens’ revenue rose 6% in the quarter to 18.89 billion euros, which was lower than forecast at 19.27 billion euros. The net profit of 1.44 billion euros is also below expectations.
Despite a bleaker outlook for digital industries, Siemens maintained its annual guidance for the group. He anticipates an increase in turnover for his fiscal year at the end of September of 9 to 11%, as well as earnings per share of 9.60 to 9.90 euros.
(Report John Revill, Victor Goury-Laffont, edited by Kate Entringer)
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