Bull today, worms tomorrow

17 March 2008 By Una Galani Follow @ugalani

Just three months ago, the German conglomerate was giving bullish guidance on growth and margins. Now it has discovered that it was too optimistic about some long term contracts and given an E900m profit warning. That casts doubts on Siemens’ management credibility.

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Siemens issued a profit warning on Monday saying that weakerthanexpected performance in selected businesses would drag down earnings in the current quarter by E900m.

In January, the German conglomerate warned investors it was reviewing various underperforming business, including Siemens' fossil powergeneration unit, mobility division and IT solutions and services.

The company will give new guidance for 2008 in April when it reports secondquarter earnings. It also confirmed its 2010 financial targets.

Siemens is recovering from a bribery scandal which erupted in 2006 and led to a radical management reshuffle. Peter Loescher, appointed chief executive in 2007, was the first outsider to run Siemens in the group's 160yr history.

On the announcement, Siemens shares fell 16 % to E66.93.

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