May 17, 2008

Siemens unveils surprise profit warning

AFP reported that German industrial giant Siemens issued a surprise profit warning last week saying that Q2 earnings would be cut by some EUR 900 million after a review of major projects.

Simens in a statement said that a weaker than expected performance in projects at its energy division, which builds power plants, its transport unit and a British contract for information technology services meant a hit to earnings in the three months to March.

It added that delays in a large number of turnkey projects in the fossil power generation operations had an adverse effect adding it had also suffered structural challenges in the supplier markets and delays recruiting experienced project engineers.

Siemens said it expected the EUR 900 million impact to be the largest piece of any additional financial burdens for 2008.

Siemens group also affirmed its 2010 financial targets, saying that definite progress toward these targets is expected in 2009. It said that the profit warning was a surprise for the conglomerate, which is active in diverse areas including the construction of tramways and turbines, and the manufacture of telecommunications equipment.