Siemens AG’s earnings fell short of analyst estimates as the company saw demand for its digital industries unit drop in China while reporting a loss on its stake in the troubled wind-turbine maker Siemens Energy.
Net income reached €1.4 billion ($1.5 billion) in the three months through the end of June, the company said Thursday. The result was up from a similarly sized loss last year but shy of the €1.6 billion result analysts predicted.
Siemens cut the profit-margin outlook for its digital industries unit by half a percentage point to as much as 23% after orders declined, mainly dragged down by a drop in demand in China for its factory-automation products.
The results cool some of the enthusiasm Siemens has generated in recent months as demand jumped for its higher-margin, software-driven products that helped automate factories and lower the carbon footprint of industrial customers. The company had raised its outlook twice this year, while a record order backlog cushioned a slowdown in new order.
Outside of its industrial business, Siemens took a hit from its 25.1% stake in Siemens Energy. Its former power generation unit recently announced that its annual net loss will quadruple as it addresses flaws in its wind turbines.
Author: Wilfried Eckl-Dorna
