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 on January 27. 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 $7.6 billion 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 1.82 billion euros ($2 billion) in the first quarter of its financial year through the end of December, down 4 percent from a year earlier.
That missed the 1.87 billion euro average forecast in a Reuters poll of analysts, pushing Siemens' stock 3.1 percent lower to 99.67 euros.
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.
PRICE PRESSURE
The results unveiled on January 27 disappointed investors.
Quarterly profit at the power and gas division slumped 39 percent on price pressures for turbines while healthcare profit fell 13 percent 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 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 percent on a comparable basis to 18.0 billion euros in the quarter, missing the lowest estimate in a Reuters poll. Sales fell 3 percent to 17.4 billion euros while net profit fell 25 percent to 1.10 billion.
Siemens said it still expected basic earnings per share to rise at least 15 percent in its financial year ending in September, but warned that the business environment would be "complex" due to geopolitical tensions, among other things.
Analysts said the forecast was realistic but warned that earnings at the oil and gas business could weaken further.
"We see the risk that the weak environment in Oil & Gas may accelerate in the course of the year further hampering going forward," DZ Bank analyst Jasko Terzic said.
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