Siemens warns US tariffs are causing investment caution
FRANKFURT : Siemens warned today that US tariffs were prompting its customers in key sectors to slow investment decisions, even as the German industrial giant reported forecast-beating quarterly profits.
The group booked net profits of €2.2 billion (US$2.6 billion) from April to June, up 5% from a year earlier, as strong orders at its division that makes trains offset problems at its factory automation unit.
Sales grew by 5% to €19.4 billion, and Siemens's shares jumped over 4% in Frankfurt after the results were released.
However, CFO Ralf Thomas cautioned that Siemens's sprawling global business was not immune from heightened global volatility unleashed by US President Donald Trump's tariff blitz.
'Ongoing tariff uncertainties and trade tensions have dampened further recovery because of a rather cautious investment sentiment in important customer industries,' he said.
He pointed to industries such as the automotive and production of industrial machinery ones.
CEO Roland Busch added that, in several key industries, 'sales cycles have been extended and investment decisions are taking longer'.
Busch said the US levies were impacting the group's unit that deals with factory automation, which had already been facing problems.
'Orders in the digital industry business recovered less strongly than anticipated due to the continuing high level of uncertainty regarding the future tariff environment and ongoing trade disputes,' he said.
The unit, which supplies robotics, other machinery and industrial software to factories, saw revenues fall by 10% in the quarter, with sales of software hit particularly hard.
The division will bear the brunt of 6,000 job cuts, about 2% of Siemens's global workforce, that were announced in March.
It has been affected by muted demand, particularly in China and Germany.
Siemens had long been a producer of heavy industrial equipment but has in recent years sought to shift its focus towards digital technology and factory automation.
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