“Siemens AG (SIE)’s first-quarter profit declined on charges for delays in high-speed trains orders and a failed solar power project, adding to more than 1 billion euros ($1.3 billion) in predicted restructuring costs this year.
Net income from continuing operations at Europe’s largest engineering company slipped 1.4 percent to 1.3 billion euros in the three months through December, Munich-based Siemens said in a statement today. Costs relating to train delivery delays and energy projects topped 300 million euros in the fiscal first quarter. The stock declined as much as 1.4 percent.
Chief Executive Officer Peter Loescher needs to defend his strategic skills today as he faces thousands of investors at the annual shareholder meeting. The CEO, on his second five-year term, has come under pressure after most deals that he supervised soured, and a push into more environmentally friendly energy generation led to spiraling costs. Profitability last year dropped back to the levels when Loescher started in 2007, prompting a new program in November to cut costs.
“The unfortunate thing we’ve seen with Siemens over the past few years is that there’s a continued line of charges,” saidJames Stettler, a London-based Canaccord Genuity analyst who rates Siemens hold. “Investors tend to be a bit skeptical with Siemens, because you never know the underlying earnings as there’s such a volatility.”
