Shares of Siemens AG were declining around 5 percent in German trading after the conglomerate reported Thursday weak profit in its second quarter on the absence of prior year’s hefty gain as well as lower revenues. Orders also were lower in the quarter. Further, the firm confirmed its fiscal 2024 outlook, but trimmed outlook for Digital Industries comparable revenue and margin.

Ralf Thomas, Chief Financial Officer, said, “Based on our solid performance in the first half of the fiscal year, a very strong balance sheet recognized by our latest rating upgrade, and our record order backlog, we look to the future with confidence as a leading technology company. We confirm our outlook for fiscal 2024.”

For the full year, the company still expects comparable revenue growth, net of currency translation and portfolio effects, in the range of 4 percent to 8 percent and a book-to-bill ratio above 1.

The profitable growth of its Industrial Business is expected to drive an increase in basic earnings per share pre PPA to a range of 10.40 euros to 11.00 euros in fiscal 2024. This excludes a positive 0.61 euros per share from Siemens Energy Investment in the first quarter of fiscal 2024.

For the second half of fiscal 2024, Digital Industries assumes that demand in its automation businesses will pick up compared to the first half of the fiscal year and expects large contract wins in its software business.

As a result, Digital Industries now expects comparable revenue for fiscal 2024 to come in minus 8 percent to minus 4 percent below the prior year, while previous outlook was at 0 percent to plus 3 percent. The profit margin is now expected to be 18 percent to 21 percent, compared to previously expected range of 20 percent to 23 percent.

In its second quarter, net income attributable to shareholders declined to 2.03 billion euros or 2.54 euros per share from last year’s 3.48 billion euros or 4.34 euros per share.

Income from continuing operations was 2.034 billion euros or 4.35 euros per share, down 43 percent from last year.

The prior year’s result was benefited from a 1.6 billion euros tax-free gain from reversal of an impairment of Siemens’ stake in Siemens Energy AG.

Earnings per share before purchase price allocation accounting or pre PPA were 2.73 euros, compared to 4.57 euros last year.

Profit Industrial Business dropped 2 percent from last year to 2.513 billion euros. Profit margin from Industrial Business dropped to 14 percent from last year’s 14.2 percent.

The company’s revenue for the quarter fell 1.3 percent to 19.16 billion euros from 19.416 billion euros last year. On a comparable basis, revenues were flat.

Orders fell 13 percent to 20.45 billion euros from last year’s 23.64 billion euros. Comparable orders were 12 percent lower than last year.

The last year result included a sharply higher volume from large orders in Mobility.

Digital Industries revenue fell 13 percent from last year to 4.51 billion euros, and orders declined 14 percent to 4.25 billion euros.

Smart Infrastructure revenue, however, grew 5 percent and orders increased 10 percent.

Mobility revenue was up 6 percent, while orders plunged 49 percent in the quarter. Further, Siemens Healthineers recorded a growth of 2 percent in each revenue and orders.

On Germany’s XETRA, Siemens shares were trading at 178.24 euros, down 5.04 percent.

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