Siemens hit by industrial slowdown and energy problems

 German engineering company Siemens (SIEGn.DE), hit by a global slowdown in power and gas and among industrial customers, said on Wednesday it missed forecasts for first-quarter sales and profit in what its chief executive called a “slow start to the year”.

Losses at its Gamesa wind power unit and feeble demand for large turbines in the slowdown pushed the company’s industrial profit down by almost a third.

There were also problems at its flagship digital industries division, where operating profit fell by nearly a third because of weak demand from customers in the automotive and machine building sectors.

“We have had better quarters in the past,” Chief Executive Joe Kaeser, who also faces protests by environmental protesters over a contract to supply signaling equipment to a coal mine in Australia, told reporters.

He said the weak performance in Siemens’ energy businesses “reinforces our priorities,” referring to the plan to spin off wind, gas and power into a separate company and list it later this year.

“For the second half of the year, we expect stabilization of the short cycle business and expect the development of financial results to go accordingly,” he said.

Kaeser said it was too early to say what the impact of the coronavirus outbreak in China would be on Siemens.

He said it was “almost grotesque” that Siemens had been singled out by environmentalists for criticism over its contract with the Adani coal mine project in Australia, and that the company would become climate neutral by 2030.

Environmental protesters gathered outside the company’s shareholder meeting, with placards bearing slogans saying “Stop the coal mine.

The company’s shares were down 0.73% at 0921 GMT.

During the first quarter, Siemens’s industrial operating profit fell 30% to 1.43 billion euros ($ 1.58 billion), missing analyst forecasts for 1.88 billion euros in a consensus gathered by the company.

Revenue rose slightly to 20.32 billion euros, undershooting estimates for 20.63 billion euros.

The trains to factory software maker said its industrial operating margin, excluding severance payments, fell to 8.3% from 10.5% a year earlier.

Gas and Power saw its operating profit plunge 63% during the first quarter, while Gamesa posted a 165 million euro loss due to project delays caused by the early onset of wintry weather in northern Europe.

Still, the company confirmed its guidance of full year earnings per share in the range of 6.30 to 7.00 euros after posting 1.33 euros during the first quarter.