Siemens reported a rise in net profit that exceeded analysts' expectations, following increased revenue in most business segments in the first quarter of the fiscal year 2024.
The German industrial company announced on Thursday that it recorded a net profit of 2.39 billion euros ($2.57 billion) in the quarter ending December, compared to 1.48 billion euros in the previous year, with a revenue increase of 1.9% to 18.41 billion euros.
The heading translated to English could be:
"Orders for this period declined by 1.4% to 22.30 billion euros, bringing the company's order backlog to 113 billion euros. This result exceeds the analysts' expectations of 1.69 billion euros in net profit and 18.58 billion euros in revenue, according to a consensus estimate provided by Siemens."
The company stated that the result reflects profit growth across most industries, led by the smart infrastructure division, which achieved the highest quarterly profit in its history.
The Intelligent Infrastructure Recorded a 26% Increase in Profits to 885 Million Euros, Driven by Demand for Data Centers and Power Distribution. The Profit Also Included a Gain of 94 Million Euros from the Partial Reversal of a Liability Related to Previous Portfolio Activities, as Reported by the Company.
In the quarter, according to CEO Roland Busch in a post-results conference with the media, the profit of Digital Industries fell by 20% as the demand for short-cycle automation products normalized and customers continued to carry out inventory reductions.
Translation:
"However, demand has improved sequentially," he added. "We expect this trend to continue in the coming quarters," said Busch. Nevertheless, the inventory reduction by customers in China could extend into the second half of the fiscal year 2024, as CFO Ralf P. Thomas reported in the same post-earnings conference.
"In other regions such as Europe and the USA, we expect that our customers' inventory levels will have mostly returned to normal by the middle of the fiscal year 2024," said Thomas. However, Siemens anticipates subdued growth in customer production in the coming quarters, especially in export-driven sectors like mechanical engineering, he added.
Orders for Digital Industries Expected to Improve Sequentially in the Second Quarter, But Remain Lower Than Previous Year. Siemens Also Expects the Division's Revenue to be Lower in the Second Quarter Compared to Last Year, According to Thomas.
As announced in November, Siemens will launch a new share buyback program worth up to 6 billion euros over a period of up to five years. Siemens confirmed its outlook for the fiscal year 2024.
