German tech giant Siemens announced an 11% increase in profit for the third quarter compared to the same period last year. On Thursday, Siemens reported an industrial profit of €3.3 billion, surpassing the forecasted €2.84 billion.
The growth was fueled by strong demand in Siemens’ electrification and industrial software businesses. However, the company acknowledged ongoing challenges in its industrial automation division, which had been struggling in previous quarters.
Despite the profit increase, Siemens saw a 15% year-on-year drop in overall orders, totaling €19.8 billion. This decline was partly due to a surge in train orders last year, which had temporarily boosted totals.
Siemens reaffirmed its guidance for the fiscal year ending in September. The company expects revenue growth at the lower end of a 4% to 8% range.
Chief Financial Officer Ralf P. Thomas expressed confidence in the company’s performance. “We achieved clear increases in both net income and profit margin in the third quarter,” Thomas said. He added that Siemens generated strong free cash flow and plans to maintain a strong focus on cash flow in the upcoming fourth quarter.
The profit margin for Siemens’ Digital Industries division is expected to be at the lower end of an 18% to 21% range. Meanwhile, the Smart Infrastructure division’s profit margin is forecasted to be at the upper end of its 16% to 17% target range.
Following the report, Siemens’ shares rose 1.51% in Thursday afternoon trading.