Siemens has missed its first-quarter profit forecasts and announced management overhauls at its power and gas and healthcare divisions, putting pressure on chief executive Joe Kaeser before a shareholder meeting yesterday.
Kaeser, a former Siemens finance chief who ousted Peter Loescher as CEO in a 2013 boardroom coup, is also expected to come under fire from shareholders over the decision to spend $7.6 billion on US oilfield equipment company Dresser-Rand last year, just before a steep slide in the oil price.
Siemens, which is one of Germany’s biggest firms by market value, said profit from its industrial businesses was €1.82 billion in the first quarter of its financial year up to the end of December, down 4 per cent from a year earlier.
That missed the €1.87 billion average forecast in a Reuters poll of analysts, pushing Siemens’ stock 3.1 per cent lower to €99.67.
Siemens, whose products range from trains to turbines, is undergoing the latest in a series of transformations under Kaeser, a company veteran who wants to make his mark on the engineering conglomerate.
He has launched a programme called “Vision 2020” to focus on electrification, automation and digitalisation, and get rid of more consumer-oriented businesses.
The results unveiled yesterday disappointed investors. Quarterly profit at the power and gas division slumped 39 per cent on price pressures for turbines, while healthcare profit fell 13 per cent on weak orders in Asia.
“There is no other business in the house with a greater need for action than power and gas,” Kaeser told reporters.
Siemens new orders fell 13 per cent on a comparable basis to €18 billion in the quarter, missing the lowest estimate in a Reuters poll. Sales fell 3 per cent to €17.4 billion while net profit fell 25 per cent to €1.10 billion.
Siemens said it still expected basic earnings per share to rise at least 15 per cent in its financial year ending in September, but warned that the business environment would be “complex” due to geopolitical tensions, among other things.