Siemens’ s struggling gas and power unit has negatively impacted on the company’s Q1 bottom line.
However, FT reports, Europe's largest industrial conglomerate mitigated the downturn with growth in its mobility division.
Chief executive Joe Kaeser said the quarter "underlines the strength of our company" as Siemens takes advantage of "the global economic upturn" and invests in industrial digitalisation. Earnings for Siemens’ industrial businesses, a closely watched measure, fell 14 per cent to €2.21bn, owing to "a sharp decline" in its Power and Gas division — where profits halved from a year ago to €238m.
The decline was expected, as the company struggles with structural changes in the sources for electricity. "Global energy trends continue to structurally reduce overall demand in markets for" products in the power and gas division, the company said, "resulting in declining new-unit business and corresponding price pressure due to current overcapacities and aggressive competitive behaviour."
Net income for the quarter that ended in December rose 12 per cent to €2.2bn. Orders rose 14 per cent to €22.5bn, beating estimates of €20.81bn, while revenue grew 3 per cent to €19.8bn and free cash flow jumped 22 per cent to €872m.
Siemens' mobility division reported a strong start to the year, with orders rising 49 per cent to €3.2bn — including a commuter rail order in Israel worth nearly €1bn —and profits climbing 38 per cent to €226m. Orders at Siemens “digital factory” — its technology-based services unit for integrating hardware and software — rose 31 per cent to €3.53bn.