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| Siemens CEO Roland Busch said the German group was 'benefiting from the boom in artificial intelligence' |
Siemens Reports Soaring Profits Fueled by Software Demand and AI Boom
German industrial powerhouse Siemens announced a significant surge in quarterly profits, driven by skyrocketing demand for production software and the rapid rise of artificial intelligence (AI). The company also benefited from customers upgrading their power grids to accommodate renewable energy.
From April to June, Siemens' net profit reached €1.98 billion ($2.2 billion), marking a remarkable 50% increase compared to the same period last year. This figure surpassed analysts' expectations, with the company generating €18.9 billion in revenue.
Siemens, a global leader with a diverse portfolio that spans from manufacturing trains and factory equipment to data center management systems, reported outstanding performance in its software business, securing multiple high-value contracts.
CEO Roland Busch highlighted the impressive growth within the company’s electrification sector, which saw a robust 20% increase in revenue. "We are reaping the rewards of the AI boom and the accelerated transition to clean energy," Busch stated during a press briefing following the results announcement. "New data centers are being built at a rapid pace, and power grids are expanding to support more renewable energy sources."
The company's "Smart Infrastructure" division, which includes its electrification business, posted a 10% increase in revenues compared to last year. However, the industrial automation segment, which focuses on factory automation, saw a decline in sales.
Despite an overall 16% decrease in orders compared to the same quarter in 2023—when train orders were at a peak—the "Mobility" division, which includes the train business, experienced a significant 70% drop in orders.
Looking ahead, Siemens reaffirmed its revenue growth target of 4-8% for the 2024 fiscal year, which concludes in September. However, the company cautioned that results are expected to be on the lower end of this range. "The economic climate in China and Europe remains challenging," Busch noted. "Recent macroeconomic indicators suggest ongoing difficulties for industrial demand."
In China, a key market, Siemens observed subdued demand, contributing to a slight dip in its stock price by about 0.5% on the Frankfurt Stock Exchange following the earnings report.
Historically known for its heavy industrial equipment, Siemens has been transitioning its focus towards digital technology and factory automation in recent years, aligning with the global shift towards Industry 4.0.
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