Siemens beats forecasts as demand for electrification and software increases

German industrial technology giant Siemens posted better-than-expected quarterly operating profit on Thursday and confirmed its full-year outlook.

Industrial profit rose to 3 billion euros ($3.3 billion) in the quarter ending in June, up 11% from the same quarter a year earlier. The figure was also above the consensus of analysts polled by the company.

Comparable orders, meanwhile, fell 15% from the same quarter a year earlier to $19.8 billion, Siemens said. It noted that order volume rose by double digits in its digital industries and smart infrastructure businesses, but declined sharply in the mobility business.

Siemens CEO Roland Busch told CNBC on Thursday that the company’s performance during the quarter was “very, very solid.”

Shares were down 0.65% as of 9:30 a.m. London time on Thursday. Stoxx 600 The index was trading down 1.13%.

The company attributed its third-quarter growth to strong demand in its electrification and industrial software businesses, but noted that the automation business remained “challenging.”

There was “exceptionally high order growth in the software business driven by a number of large contract wins for licensed software,” the company said, with profitability growth more than offsetting a profit decline in automation.

“Smart Infrastructure continued its broad year-over-year earnings and profitability growth driven by higher revenue, increased capacity utilization and continued productivity improvements,” the company added.

On a call after the results were released, Siemens CEO Busch told reporters that it would not be possible to repeat the gains in the software business in the same way, according to Reuters.

Siemens warned of a sharp slowdown in its automation business in its previous results.

The company also confirmed its outlook for the full financial year on Thursday, but noted that comparable revenue growth for the Siemens Group is expected to be at the lower end of the projected range of 4%-8%.

Speaking to CNBC, Busch attributed this projection to “difficult market environments,” adding that key issues were weakness in the industrial market and continued inventory buildup, which would take time to clear.

He said the company had the right portfolio and was equipping it with artificial intelligence to support customers.

“Overall, we’re looking forward to what’s next,” Busch said.