Siemens’s earnings fell short of analyst estimates as the company saw demand for its digital industries unit drop in China while reporting a loss on its stake in the troubled wind-turbine maker Siemens Energy.
Net income reached €1.4 billion ($1.5 billion) in the three months through the end of June, the company said Thursday. The result reversed a loss during the same period last year but was shy of the €1.6 billion analysts predicted.
Siemens cut the profit-margin outlook for its digital industries unit by half a percentage point to as much as 23% after orders declined by more than a third, mainly dragged down by a drop in demand in China for its factory-automation devices.
The results cool some of the enthusiasm Siemens has generated in recent months as demand jumped for its higher-margin, software-driven products that helped automate factories and lower the carbon footprint of industrial customers.
The company, which has raised its outlook twice this year, confirmed its overall forecasts and said a record €110 billion order backlog cushioned a slowdown in new sales.
Read more: Siemens Energy Sees €4.5 Billion Hit, Wind Losses Prompt Review
Outside of its industrial business, Siemens reported a €647 million loss from its 25.1% stake in Siemens Energy. Its former power generation unit recently announced that its annual net loss will roughly quadruple as it addresses flaws in its wind turbines.
Last year, Siemens posted a loss in its fiscal third quarter due to the Siemens Energy impairment.
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