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German industrial giant Siemens said Thursday its quarterly profits jumped sharply, driven by demand for production software as well as the \u201cboom\u201d in artificial intelligence and customers upgrading power grids.<\/p>\n
Net profit was 1.98 billion euros ($2.2 billion) from April to June \u2014 up about 50 percent from a year earlier and higher than analyst forecasts \u2014 on revenue of 18.9 billion euros.<\/p>\n
Siemens, whose sprawling global business runs from making trains and factory equipment to systems that manage data centres, said its software business performed strongly, winning a series of major contracts.<\/p>\n
The electrification arm of the group also grew by more than 20 percent, said CEO Roland Busch.<\/p>\n
\u201cWe are benefiting from the boom in artificial intelligence, and the accelerated energy transition,\u201d he told journalists after the results were released.<\/p>\n
\u201cOn the one hand, many new data centres are being built, and on the other, power grids are being expanded to accommodate more renewable energy.\u201d<\/p>\n
The group\u2019s \u201csmart infrastructure\u201d division, which includes the electrification business, reported revenues were up 10 percent overall from a year earlier.<\/p>\n
But sales fell in its industrial automation business, which covers areas like automating factories.<\/p>\n
Orders were down 16 percent overall from the same quarter in 2023, although that period saw a bumper crop of train orders.<\/p>\n
The \u201cmobility\u201d division, which includes the train business, saw orders drop 70 percent.<\/p>\n
The Munich-based group confirmed its outlook of achieving revenue growth of four to eight percent over its 2024 fiscal year, which runs to the end of September.<\/p>\n
However, it cautioned the final result would likely be at the lower end of this range, with Busch saying that \u201cthe economic situation in China and Europe remains difficult\u201d.<\/p>\n
\u201cRecent macro indicators point to continuing challenging conditions for industrial demand,\u201d he added.<\/p>\n
In key market China, demand remained \u201cmuted\u201d, Siemens said.<\/p>\n
The group\u2019s shares were down about half a percentage point on the Frankfurt Stock Exchange following the results.<\/p>\n
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.<\/p>\n<\/div>\n