Siemens has delivered impressive financial results for the third quarter of fiscal year 2024, showcasing a net income that exceeded market expectations. The German technology giant reported a net income attributable to shareholders of 1.98 billion euros for the three months ending on June 30, a substantial increase from 1.28 billion euros in the same quarter the previous year.
This figure surpassed the Visible Alpha consensus estimate, which had predicted a net income of approximately 1.8 billion euros for common stockholders. The company’s revenue also showed significant growth, rising to 18.9 billion euros compared to 18.15 billion euros one year prior. This revenue growth was largely driven by a robust performance in their smart infrastructure division, which witnessed a double-digit growth rate, coupled with contributions from Siemens Healthineers and the mobility sector.
Nevertheless, this revenue growth slightly missed the Visible Alpha expectations that called for 19.2 billion euros, primarily due to a marked decline in large mobility orders, following an exceptional record-high order intake in the previous year. During the earnings call, CEO Roland Busch expressed pride in the electrification sector's performance within Smart Infrastructure, highlighting an impressive growth rate of 21%.
He noted that Siemens is capitalizing on the momentum driven by artificial intelligence within the data center market, alongside the rapid expansion of grid infrastructure spurred by the shift towards renewable energy sources. "Our strong execution resulted in an Industrial Business profit of over 3 billion euros, reflecting an expansion in margin of 110 basis points over the previous year.
All business sectors have seen improvements in profitability, with Smart Infrastructure and Siemens Healthineers making the largest contributions," Busch stated. Even though the group experienced a 16% decrease in orders year-over-year, totalling 19.8 billion euros, this figure still exceeded the expectations set by Deutsche Bank Research by 3%.
Additionally, the order backlog remained substantial, at 113 billion euros. Following a disappointing report from Siemens Healthineers last week and ongoing challenges in the automation sector, Deutsche Bank Research regarded Siemens' latest quarter results as reassuring, affirming all aspects of the company’s FY24 guidance.
The conglomerate has narrowed its projections for full-year comparable revenue growth, adjusting the forecast to the lower end of its previously established range of 4% to 8%, net of currency translation and portfolio effects. Divisions within the company also maintained their guidance, with comparable revenue from digital industries expected to decline between 8% and 4%.
In contrast, revenue from smart infrastructure and mobility is anticipated to increase within the ranges of 8% to 10% and 8% to 11% respectively. CFO Ralf Thomas highlighted, "In the third quarter, we achieved notable increases in both net income and profit margin. We have sustained strong free cash flow and are committed to maintaining a robust focus on cash management as we approach the fourth quarter." As for stock performance, Siemens shares were trading at $155.64, with a change of $+0.24, reflecting a percentage increase of +0.15%..