Siemens cuts 2013 outlook amid weak industrial demand | Business| Economy and finance news from a German perspective | DW | 02.05.2013
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Siemens cuts 2013 outlook amid weak industrial demand

German engineering giant Siemens has said it expects its revenue to fall moderately this year as a result of weak industrial demand and one-off penalty charges. But the firm's profit in the latest quarter was still fine.

Siemens 2013 net profit was expected to come in near the "low end" of its earlier forecast of full-year earnings in the range of 4.5 billion euros ($5.9 billion) to 5 billion euros, the German engineering giant announced Thursday.

"While we were able to clearly increase orders, we still have challenges regarding revenue and profit," Siemens Chief Executive Peter Löscher said in a statement.

Löscher pointed to burdens on profits attributed to the company's high-speed trains projects and from grid connection projects linked to wind power generation in the North Sea.

Siemens is under pressure for failing to deliver on time a number of new generation ICE high-speed trains to German rail operator Deutsche Bahn due to technical problems. Deutsche Bahn has said it would sue Siemens for damages.

As a result, Siemens took charges of 161 million euros related to the delayed deliveries. In addition, the firm expects a 300-million-euro loss in 2013 as it closes its solar energy business.

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However, in the firm's second business quarter, which runs from January through March, Siemens' net profit actually grew by 10 percent to 1.03 billion euros.

Orders also rose 20 percent to reach a total of 21.5 billion euros. Nevertheless, its second-quarter revenue fell 7 percent to 18 billion euros, prompting Löscher to describe that quarter as mixed.

Siemens released its figures as it tries to cut costs by 6 billion euros in the course of this year.

uhe/ipj (dpa, AFP, AP)

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