Siemens’ profit declines in Q3
MUNICH: Siemens said that deteriorating demand from automotive and machine building firms hit its third-quarter profit, becoming the latest industrial company to warn about a weaker environment hitting its business.
The company’s flagship factory automation unit saw orders and revenue fall as customers in Europe and the Americas held back on investments as economies slowed.
Profit margins also shrank as Siemens sold less of its more profitable short-cycle products such as industrial controllers and drives, dragging down the company’s net profit by 6%.
Chief Executive Joe Kaeser said the trains to turbines maker had seen conditions become much weaker in its key markets but the company nonetheless confirmed its full-year guidance.
“As indicated already quite some time ago, geopolitics and geoeconomics are harming an otherwise positive investment sentiment,” he said in a statement.
Shares in Siemens were down 5.04% after falling to their lowest level since February earlier. Siemens’ Swiss peer ABB last week warned of a slowdown in China, with lower orders. German luxury carmaker Daimler has also revised down its forecast for Mercedesbenz car sales.
Other companies on Thursday also highlighted tougher conditions. The world’s biggest steelmaker Arcelormittal cut its forecast for global steel demand, with a sharper reduction now envisaged in Europe due to a lean automotive market. Germany’s Rheinmetall downgraded a forecast for its automotive division.