Frankfurt (Germany) (AFP) – Siemens warned on Thursday 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 euros ($2.6 billion) from April to June, up five percent from a year earlier, as strong orders at its division that makes trains offset problems at its factory automation unit. Sales grew by five percent to 19.4 billion euros, and Siemens’s shares jumped over four percent in Frankfurt after the results were released.
But chief financial officer 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 percent in the quarter, with sales of software hit particularly hard. The division will bear the brunt of 6,000 job cuts, about two percent 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.
© 2024 AFP
