Siemens meets quarterly profit forecast, but weaker dollar drags overall results
The company, which produces industrial software and trains, said its industrial profit declined 7% to 2.82 billion euros ($3.29 billion) for the three-month period ended June 30, in line with analyst forecasts compiled by Siemens.
Earnings were impacted by currency translation effects, particularly the weakening of the dollar against the euro during the quarter, as well as restructuring costs linked to job cuts in Siemens' flagship Digital Industry division.
Revenue rose 3% to 19.38 billion euros, beating forecasts of 19.24 billion euros.
Chief Executive Roland Busch said the group had delivered a robust performance despite the tough macroeconomic conditions, but orders had recovered less strongly than anticipated due to the continuing high level of uncertainty following U.S. President Donald Trump's global trade reset.
"This climate of volatility is weighing on business sentiment in several of our core industries – such as automotive and machine building, where sales cycles have been extended and investment decisions are taking longer," Busch said after the release of the results.
CFO Ralf Thomas said they are closely monitoring developments on U.S. tariffs, especially concerning Switzerland, which is home to Siemens' Smart Infrastructure (SI) division and burdened with the highest U.S. tariff rate in Europe.
"There are always negotiations, sometimes re-negotiations, and it would therefore be irresponsible to immediately react to every single announcement on the subject," Thomas said, adding that it's too early to draw conclusions about future value creation.
Currency translation effects took four percentage points from order growth and three percentage points from revenue growth, Siemens said.
The U.S. dollar weakened 8% against the euro during the quarter, caused by concerns over the Federal Reserve's independence, the credibility of official statistics, ballooning fiscal debt and rising bets on interest rate cuts.
Despite the ongoing uncertainty in the global economic environment, Siemens confirmed its outlook for its 2025 financial year, which runs to the end of September.
It still expects group revenue to grow by 3%-7% on a comparable basis, and post basic earnings per share in the range of 10.40 to 11 euros.
Thomas said the company expects organic revenue growth in its Digital Industry division to fall within the lower half of the projected range of -6% to 1% for fiscal 2025.
Siemens' SI division - its most profitable - will have an operational profit margin toward the upper end of the range of 17%-18% in fiscal 2025, he said.
SI provides a large range of products and services, helping to control heating, lighting and access to buildings, as well as equipment and software for power distribution networks.
Siemens said the outlook calculation did not include the purchase of U.S. engineering software firm Altair Engineering and the acquisition of U.S.-based Dotmatics, which weighed on its profit margin.
($1 = 0.8568 euros)
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