Sunburned

2 May 2013 By Olaf Storbeck

The German industrial giant issued yet another profit warning, and disclosed an embarrassing delay in getting out of its cash-burning solar operations. Execution difficulties are tarnishing management’s credibility. CEO Peter Loescher can’t afford any more blunders.

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Siemens announced a drop in revenue and profit for the first six months of its financial year 2013. Sales fell by 4 percent to 36.2 billion euros, while profit dropped by 17 percent to 2.9 billion euros. The profit margin decreased by 1.4 percentage points to 8 percent. Siemens indicated that it will struggle to meet its previously announced profit target of 4.5 to 5 billion euros.
The company sees income from continuing operations at “the low end” of that range but expects that one-off burdens will dent profit by another 500 million euros. The delayed exit from the loss-making solar business is a major contributing factor.
It announced that orders rose by 7 percent in the first half of its fiscal year.

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