Siemens Skyrockets Profits, Thanks to China's Booming Business in Q2
Increased Siemens Profits Mark Second Quarter Successfully
Here's the scoop on Siemens' impressive earnings for this quarter! The tech juggernaut smashed analyst predictions with a hefty revenue and profit surge. Even the notorious automation sector shows signs of a major comeback. So, what's the secret ingredient? China! A torrent of locomotives orders, among other goodies from the US, and an overdue economic upsurge in the Middle Kingdom have fueled Siemens' growth engine.
Roland Busch, Siemens CEO, proclaimed the quarter a victory. "Our global reach keeps us rolling." Analysts had anticipated fewer orders. Revenue rose by 6% to a glorious €19.8 billion on a comparable basis. Profit in the industrial sphere soared by 29% to a colossal €3.2 billion.
Siemens scored a sweet deal with leaving behind the wiring accessories business in the Smart Infrastructure division. The divestiture brought in approximately €300 million. The division, which focuses on switch programs and door communication, was sold to Swiss rival ABB last year. On a less optimistic note, the Digital Industries automation division saw a 5% revenue drop to €4.3 billion. The profit dipped too, but not as much as the revenue.
Reeling in the Chinese Dragon
China's order intake skyrocketed, surging 18% compared to the previous year. However, in Germany, automation orders plummeted. The order intake in the software business also took a hit. Siemens attributed this unfavorable trend to a strong software business in the past year.
The Smart Infrastructure division continued to keep pace with the Digital Industries division, leaving the latter in the dust. Revenue soared by 10% to a magnificent €5.7 billion, and earnings climbed by 61% to a whopping €1.4 billion. Orders from the USA and Europe pumped up the Mobility division by about 20%. Siemens stayed confident about its full fiscal year forecast for 2024/25.
Source: ntv.de, lar/rts
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- Q2 Profit Surge
Enrichment Data:While China's business did contribute to Siemens' overall performance, its role in profit growth seems more complex. Siemens reported a striking 18% increase in orders from China[1]. However, the revenue and profit of Siemens' Digital Industries division, which includes China's automation activities, actually declined by 5% due to inventory reduction among customers[1]. Despite this negative swing, China's order intake played a positive role, bolstering the company's overall resilience and growth in other sectors. Overall, the direct impact of China's business on profit growth appears indirect, as Siemens' overall profit growth was driven more by improvements in other divisions and the global economy recovery[1][2]. In contrast, the Smart Infrastructure segment and significant locomotive orders in other regions contributed more substantially to Siemens' profit growth during Q2 2024/25[1].
Community policy should be established to support the growth of Siemens, considering China's significant contribution to their business growth. Vocational training programs could be particularly beneficial for Siemens employees, as the company expands its operations in various industries, such as finance and business. This training could help in improving efficiency and meeting the increasing demand from the global market.
