A raft of poor earnings reports from automation providers this week marked the last vestige of a quarter most would probably like to forget.
France-based Schneider Electric today revealed slumping second-quarter results, as the economic vise that has squeezed technology purchases across many markets took its toll on the automation and electrical technology specialist.
Sales in Q2 were down more than 15% to €3.93 billion. The company’s earnings, reported for the first six months of the year, fell 42% to €791 million, compared with €1.36 billion in the prior-year second quarter.
The biggest loser in the quarter was Schneider’s Automation & Control division, which posted €1.04 billion in sales, 24% off the prior-year period.
In a vague forecast, Schneider CEO Jean-Pascal Tricoire said in a statement, “We expect the organic sales trend in the second half to be in line with the level of the first half, with early signs of improvement emerging in some new economies.”
Not far away in Munich, diversified Siemens rode the stability of its Energy and Healthcare units to a cushioned landing in its fiscal third quarter, ended June 30, but orders in its mainstay Industry division nosedived.
Company-wide revenue was down 4% year over year to €18.3 billion from €19.1 billion, while net income of €1.3 billion was down 7% from €1.4 billion.
But significantly worsening conditions in factory automation contributed to a 42% blow to order intake in the Industry sector, totaling €6.60 billion compared with €11.41 billion a year earlier. An order backlog helped soften the top-line impact, but revenue still dropped 13% to €8.13 billion.
Lower revenue had a significant effect on profitability within the Industry sector’s Automation, Drive Technologies, and OSRAM divisions, due to reduced capacity utilization and a less favorable product mix compared with the prior-year period, the company said. However, as was the case for its counterpart Schneider, Industry Automation was the hardest hit as revenue and orders fell 29% and 30%, respectively.
Mobility — which accounts for 12% of Siemens’ Industry business — was the only division that grew in the quarter, delivering a 13% increase in revenue.