Despite a decline in digital sector orders, Siemens' profit exceeded expectations.

• The decline in market conditions led to a 30% drop in new orders for Digital Industries, which provides software and controllers for company production lines.
• Siemens stated that customers who accumulated inventory to prevent stockouts in the previous year postponed purchasing new equipment and opted to deplete their reserves.

Despite a slowdown at its flagship factory automation unit, the German engineering group reported first-quarter profit slightly ahead of expectations on Thursday.

The decline in market conditions led to a 30% drop in new orders for Digital Industries, which provides software and controllers for company production lines.

Siemens stated that customers who accumulated inventory to prevent stockouts in the previous year postponed purchasing new equipment and opted to deplete their reserves.

Weakening demand from China was the main factor contributing to the downturn, which was most pronounced in Asia and Australia.

Despite the improvement in the situation in China compared to the previous quarter, Siemens predicted that conditions would remain challenging in its third largest market following the US and Germany.

Chief Executive Roland Busch stated to reporters that we expect regional variations in how customers eventually bring their inventories back to standard levels.

If China's economic recovery is slow, it may take longer to recover.

Despite a downturn, Siemens's train-making Mobility business and its building automation arm Smart Infrastructure had a strong performance, with the latter achieving its best-ever quarter.

The global economy is reflected in Siemens's financial outcomes, like other industrial companies.

Siemens, according to Busch, was not significantly affected by the Red Sea shipping crisis because of its local supply chains and expertise in managing such issues.

Siemens reported a 3% increase in industrial profit to 2.72 billion euros ($2.93 billion) for the three months ending December, surpassing analysts' forecasts of 2.64 billion euros.

Despite currency translation effects, mainly from a stronger dollar, revenue rose 2% to 18.41 billion euros, below the forecast of 18.58 billion euros.

Siemens affirmed its full-year forecast, predicting revenue growth ranging from 4% to 8%, following divestments and adjusting for currency fluctuations.

The backlog of orders, currently valued at 113 billion euros, provided Busch with confidence for the future.