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Business

Siemens revises forecast as economic crisis hits hard

Shrinking orders have led Europe's largest engineering group to revise downwards its profit outlook in spite of strong second-quarter results

Siemens' CEO Peter Loescher

Siemens CEO Loescher said he was satisfied with the Q2 results

German engineering conglomerate Siemens has slashed its operating profit forecast for the current financial year by 17.5 per cent as the global economic crisis continues to hit its order books.

Despite strong quarterly results, the Munich-based company now expects its operating profit for the year to the end of September to be 6.6 billion euros ($8.68 billion), down from the 8.0 to 8.5 billion euros it had set as a goal in July last year when the world economy had been forecast to grow 3 percent in 2009.

The downwardly-revised profit goal for 2008-2009 is nevertheless slightly higher than the previous year's profits of 6.5 billion euros.

"In view of the deepening crisis in the world economy, we are satisfied with our second-quarter results," said Siemens' Chief Executive Peter Loescher in a statement. However, Loescher added that the company expects tougher conditions ahead.

Of Siemens' three divisions, industry - which accounts for nearly half of group sales - was the worst hit. Siemens' energy and healthcare divisions performed relatively well due to orders booked two years ago.

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