Earnings Surprise

premium

At Siemens, Signs of Turnaround As Problems Loom from Energy Business, Russia Sanctions

Kaeser
Joe Kaeser presented Siemens' financial figures this morning.
  • Why it matters

    Why it matters

    Siemens restructuring plan to improve profitability is slowed down by its energy operations. Sanctions against Russia might also hurt.

  • Facts

    Facts

    • Siemens energy operations may pose problems “well into 2015”, chief says
    • Operating income jumped 36 percent to €1.4 billion ($1.9 billion) in the April-to-July period
    • Siemens CEO concerned about Russian developments.
  • Audio

    Audio

  • Pdf

Siemens, while reporting better-than-expected quarterly earnings amid a far-reaching restructuring, warned on Thursday that problems in its energy businesses, and the consequences of western sanctions against Russia, could weigh on its profit well into next year.

In a conference call, Siemens Chief Executive Joe Kaeser said several energy projects such as its offshore wind parks in the North Sea posed “potential risks going forward.”

“It takes time for it to grow out of the backlog of legacy issues,” Mr. Kaeser told analysts and journalists. “We’ll have some more quarters where we’ll have challenges. It may well go into 2015.”

When taking Siemens’ helm last year after serving as its finance chief, Mr. Kaeser initiated a divestment program to exploit the company’s most-profitable businesses, and set in motion plans to eliminate a management layer.

Want to keep reading?

Subscribe now or log in to read our coverage of Europe’s leading economy.