(MENAFN- Gulf Times) Siemens missed first-quarter profit forecasts and announced management overhauls at its power and gas and healthcare divisions, putting pressure on chief executive Joe Kaeser ahead of a shareholder meeting yesterday.
Kaeser, a former Siemens finance chief who ousted Peter Loescher as CEO in a 2013 boardroom coup, is also expected to come under fire from shareholders over the decision to spend $7.6bn on US oilfield equipment company Dresser-Rand last year, just before a steep slide in the oil price.
Siemens, one of Germany's biggest firms by market value, said profit from its industrial businesses was ‚¬1.82bn ($2bn) in the first quarter of its financial year through the end of December, down 4% from a year earlier.
That missed the ‚¬1.87bn average forecast in a Reuters poll of analysts, pushing Siemens' stock 3.1% lower to ‚¬99.67.
Siemens, whose products range from trains to turbines, is undergoing the latest in a series of transformations under Kaeser, a company veteran who wants to make his mark on the engineering conglomerate.
He has launched a programme called "Vision 2020" to focus on electrification, automation and digitalisation, and get rid of more consumer-oriented businesses.
The results unveiled yesterday disappointed investors. Quarterly profit at the power and gas division slumped 39% on price pressures for turbines while healthcare profit fell 13% on weak orders in Asia.
"There is no other business in the house with a greater need for action than power and gas," Kaeser told reporters.
Siemens announced late on Monday that the chief of its power and gas business, Roland Fischer, was leaving the company at the end of January at his own request, and named a new team to lead the healthcare business.
Management also defended the Dresser-Rand deal, with finance chief Ralf Thomas saying: "There's no reason to think there's a different valuation now than at the time we agreed it."
Siemens new orders fell 13% on a comparable basis to ‚¬18.0bn in the quarter, missing the lowest estimate in a Reuters poll. Sales fell 3% to ‚¬17.4bn while net profit fell 25% to ‚¬1.10bn.
Siemens said it still expected basic earnings per share to rise at least 15% in its financial year ending in September, but warned that the business environment would be "complex" due to geopolitical tensions, among other things.
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