Hard reign

27 January 2015 By Olaf Storbeck

Lacklustre quarterly results hit shares in Europe’s largest industrial group. After 18 months, CEO Joe Kaeser has not lived up to early hopes. He’s completed some smart disposals. But he’s also overspent on shale and, by centralising power, hobbled unit managers.

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Siemens shares lost 2.8 percent to 100.05 euros early on Jan. 27, after Europe’s biggest industrial group by market value missed quarterly profit forecasts. The German company said profit from its industrial businesses was 1.82 billion euros ($2 billion) in the first quarter of its financial year through the end of December, down 4 percent from a year earlier. That missed the 1.87 billion euro average forecast in a Reuters poll of analysts. The profit figure is before interest, tax and accounting charges relating to acquisitions, and excludes the contribution from Siemens’ financial services business.

New orders fell 13 percent on a comparable basis to 18 billion euros in the quarter, missing the lowest estimate in a Reuters poll. Sales fell 3 percent to 17.4 billion euros while net profit fell 25 percent to 1.1 billion euros.

Siemens said it still expected basic earnings per share to rise at least 15 percent in its financial year ending in September, but warned that the business environment would be “complex” due to geopolitical tensions, among other things.

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Hard reign

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