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Siemens on Friday said it expected “even stronger impacts” from the coronavirus pandemic in the weeks ahead as it ditched its 2020 guidance and posted an 18% drop in industrial profit during its second quarter.
The trains to industrial software maker said it now expected a “moderate decline” in comparable full year revenue. Siemens had previously predicted moderate growth.
Speaking to CNBC, Chief Executive Joe Kaeser said he expected to see the bottom in the third quarter.
“We are reasonably confident we’re going to see the trough in our fiscal Q3,” he said, based on feedback from customers, the supply chain and expectations for some government restrictions to continue.
“The question – the jury is still out – is how long it’s going to last.”
Kaeser said the company was planning for a “2-to-3 quarter trough before we see a substantial uptick again.”
“Generally we believe that before we don’t have any test or any vaccine, we are not going to go back to normal at all,” he added.
The company’s flagship factory automation unit and smart infrastructure business would be the hardest hit, the company said.
During its second quarter Siemens said all of its operations were affected by the COVID-19 pandemic as shareholders’ net profit fell 64% to 652 million euros ($706.90 million).
Group orders fell 8% to 15.15 billion euros while adjusted operating profit for its industrial business dropped 18% to 1.59 billion euros.
Revenue was flat at 14.23 billion euros as increases at Siemens Healthineers and its train-making mobility unit offset a decline at Digital Industries.
The figures did not include Siemens Gas and Power and Siemens Gamesa Renewable Energy, which are being separated into a new company called Siemens Energy that will be floated later this year.
During the first quarter the discontinued operations posted a loss of 317 million euros, down from a 205 million euro net profit a year earlier.
Kaeser, who is due to step down by early next year and become chairman of Siemens Energy, added that he was pleased the spin-off of Siemens Energy by the end of September was still on track.
Siemens said it also plans to separate and list Flender, its mechanical drive manufacturer which has annual sales of around 2 billion euros.
Shareholders will vote on the plan at the next AGM in February 2021.