The buyback will extend over a period of up to five years, Siemens said Wednesday, with the move suggesting the German engineering company is confident in its cash generation. Orders rose 11% during the second quarter, led by demand for software and smart building infrastructure. Profit declined, slightly missing expectations.

“There’s a lot of uncertainties, we have the war, we have impacts on the supply chains, primary, secondary impacts,” Chief Executive Officer Roland Busch in an interview with Bloomberg Television. “We see inflation going up that can hold back the market.”

The shares declined as much as 1.5% in early Frankfurt trading, trimming gains this year to 9.4%.

While the buyback has come earlier than expected, “we had hoped for either a higher number” or a shorter timeframe, JPMorgan analysts led by Phil Buller said. Robust results among competitors, such as ABB Ltd. elevated expectations for Siemens’ earnings, Bernstein analysts led by Alasdair Leslie said in a note. “The lack of a group guidance upgrade is likely to be a slight disappointment.”

Germany’s most valuable firm, which makes everything from trains to factory software and controls, has been pushing further into automation and artificial intelligence for the shop floor. Siemens, which partners with the likes of Nvidia Corp. introduced an agentic AI capable of independently writing code for machines at the Hanover trade fair in April.

The firm last week scored a win on AI regulation after a provisional European Union agreement to streamline certain rules on artificial intelligence. Engineering equipment makers like Siemens are set to face fewer hurdles because the rule changes will differentiate between industrial and consumer-facing AI products.

“We are happy with that step,” Busch said, adding that he hopes for similar revisions for the EU’s Data Act. “That would help definitively to deploy more resources in Europe and obviously to ramp up our AI offerings.”

Busch last month warned his company would shift AI investments elsewhere unless the rules are changed.

Higher Outlook

During the second fiscal quarter, profit at the Digital Industries unit, which makes factory software and automation technology, jumped 35%, mainly on higher software revenue. Efforts to integrate recent acquisitions and a transition to a subscription-based pricing model for its software has weighed on revenue in previous quarters. Siemens raised the outlook for revenue growth and profit margin for the division.