GERMAN industrial bellwether Siemens yesterday took a more pessimistic stance on the rest of the year as industry demand remained weak and project charges weighed on quarterly profits.
With the Eurozone economy in recession, weaker-than-expected growth in the United States and an unexpected slowdown in China's manufacturing sector, hopes that the world’s economy may start to recover soon have been fading.
Siemens, which makes products ranging from trains and turbines to hearing aids, said it now expected net profit from continuing operations to reach the lower end of its outlook of €4.5bn to €5bn.
Siemens chief executive Peter Loescher has been criticised for being too slow to react to a downturn in the global economy.
He put on the back burner a plan to increase annual sales by about a third to €100bn and late last year launched a massive push to save €6bn over two years.
In its fiscal second quarter, which ended in March, Siemens saw revenue slip by seven per cent to €18bn due mostly to lower wind power sales in the United States and sliding demand for industry automation and drive technologies.
But quarterly orders, its indicator for future sales, jumped 20 per cent, more than expected, to €21.45bn.
City A.M. Reporter