By Nina Kienle


Siemens posted higher third-quarter net profit and revenue, and said the artificial-intelligence boom and the energy transition are powering demand.

The German industrial giant said Thursday the economic situation in China and Europe remained difficult, but the company kept delivering orders it had on its backlog and expanded profitability. Siemens said the performance of its smart infrastructure segment stood out, continuing to benefit from an AI-driven data-center buildout and demand from energy customers.

Industrial companies that have reported so far this earnings season said they experienced strong demand from data centers amid a surge in construction activity. European peers ABB and Schneider Electric said results benefited from that trend. In the U.S., Eaton executives said stronger-than-expected growth in data centers was a key reason behind an increase in the company's sales growth guidance for the year.

"We're benefiting from the boom in artificial intelligence, or AI, and the accelerated energy transition," Siemens Chief Executive Roland Busch said in a call. "On the one hand, many new data centers are being built and, on the other, power grids are being expanded to accommodate more renewable energies."

Siemens executives expect AI-driven growth to continue, even if not at current steep levels, but acknowledged there has been a certain hype about the technology in the past quarters.

"The boom in AI is acting as a supercharger, which requires more and more computing power and corresponding data centers," Busch said.

Busch said the demand for electrical power will triple by 2050.

For the quarter ended June 30, Siemens's net profit increased to 1.98 billion euros ($2.16 billion) from EUR1.28 billion for the same period of the prior year. Analysts had forecast net profit at EUR1.80 billion, according to consensus estimates provided by Visible Alpha.

Revenue rose to EUR18.90 billion from EUR18.15 billion. Orders amounted to EUR19.78 billion, down from EUR23.49 billion. The company attributed the lower order intake to a high basis of comparison from the prior-year quarter, particularly at its mobility business.

Analysts expected revenue and order intake at EUR18.91 billion and EUR19.18 billion, respectively, according to consensus estimates provided by the company.

Profit from industrial business rose 11% to EUR3.03 billion, with a margin increase to 16.5% from 15.4%. Profit margins expanded across all industrial businesses, Siemens said.

Shares traded 0.9% lower at EUR154.70 in European morning trading.

At its smart industries segment, Siemens saw significant order growth on contributions from all businesses, most notably the electrification and buildings businesses, it said. The group saw order intake that included a number of larger contracts from data center and energy customers.

"Another growth driver was our particularly strong industrial software business, which won several large license contracts. The industrial automation business remains challenging," Busch said.

The conglomerate, coming off weak results from its majority-owned healthcare business Siemens Healthineers last week and facing a subdued automation market, delivered a reassuring quarter, Deutsche Bank Research analysts Gael de-Bray and Nabil Najeeb said in a note to clients.

For the fiscal year ending in September, the company backed its outlook as given in the prior quarter. It continues to expect comparable revenue growth for the Siemens Group and profit margin for Digital Industries expected at the lower end of the previously-guided range and profit margin for smart infrastructure expected is at the upper end of the range, it said.


Write to Nina Kienle at nina.kienle@wsj.com


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08-08-24 0618ET