Project delays hit profits at Siemens
German engineering giant Siemens has announced a surprise profit warning, blaming project delays and cancelled orders.
The company said in January that it expected sales this fiscal year to increase at twice the rate of global gross domestic product growth, while operating profit should grow at least twice as fast as sales.
Now it expects a negative impact on earnings of around 900 million euros in the current quarter.
The company said that project delays occurred especially at Siemens̵7; power station unit, which were due to problems with suppliers and difficulties with recruiting engineers. It also said the British government had cancelled an 85m euro IT project.
Siemens is in the middle of a restructuring programme, under its chief executive Peter Loescher, who took over last year when the company was struggling with allegations of corruption.
His changes so far have included reorganising the company's 10 units into three divisions.
Image: Peter Loescher, chief executive of Siemens