Siemens, the German industrial conglomerate, has attributed disappointing sales to China’s lackluster economy. Despite swinging to a fiscal third-quarter profit of €1.28 billion ($1.59 billion) and a 6% increase in revenue to €18.89 billion, Siemens fell short of the company-compiled consensus, which predicted earnings of €1.41 billion on sales of €19.27 billion.
However, there was some good news for Siemens as orders rose by 10% to €24.24 billion, surpassing analysts’ expectations of €22.19 billion.
The company’s shares, listed as SIE, experienced a 4% slump in afternoon trade in Germany.
Siemens CEO Roland Busch expressed concern regarding the slow materialization of China’s market recovery in manufacturing, stating, “China is clearly a lot weaker than expected, and while the execution looks stronger than peers such as Rockwell or Schneider, investor focus is expected to be on demand development into FY24.”
Siemens highlighted that new orders in China declined in the second half of the quarter, particularly in the automation sector. However, the company has not yet experienced negative repercussions in key export markets, such as Germany and Italy. Despite lowering its outlook for the digital industries segment, Siemens maintained its guidance for organic sales growth in the fiscal year.
Analysts from Bank of America, led by Alexander Virgo, suggest that investor attention will be focused on demand development in FY24 due to China’s weaker-than-expected performance.
