Shares in German expertise large Siemens fell by over 5% on Thursday after the corporate posted a decline in earnings within the fiscal second quarter and stated its automation division had slowed.

The firm’s industrial revenue got here in at 2.51 billion euro ($2.73 billion) within the three months ending in March, down 2% from the identical quarter final 12 months. The determine was additionally under the company-compiled analyst forecast of two.68 billion euro which was reported by Reuters.

Net revenue fell to 2.2 billion euro within the three months to the tip of March, down 38% year-on-year, whereas gross sales shed 1% to 19.16 billion euro.

Shares in Siemens had been buying and selling round 5.1% decrease at 11:49 a.m. London time.

Siemens focuses on automation and digitalization and produces expertise for a variety of sectors equivalent to transport and healthcare.

The firm stated that its automation division, which is a part of its digital industries enterprise, declined sharply.

“We see a decline of minus 20%. However you have to see that against the backdrop of a record-high prior quarter and you see still a weakness in the Chinese market, so overall there are no structural reasons for that,” Siemens CEO Roland Busch informed CNBC’s Annette Weisbach on Thursday.

The quarter was total “solid,” Busch stated. “Demand for our products is strong and our growth drivers digitalisation and sustainability they’re full intact.”

Busch stated there had been a “huge uptick” in demand for automation in recent times, which drove inventory ranges greater. Reducing this now could be taking a while and inflicting a “destocking effect,” he stated.

“It takes a little bit longer because of the demand is not that high and we are reducing the stock as we go,” Busch added.

Lower demand in China is pushed by weaker personal consumption, exports not accelerating and fewer direct funding within the nation, he stated — however there was “no doubt” that China will likely be again ultimately.