German electronics and engineering group Siemens AG said today it expected fourth-quarter earnings to decline from the previous quarter after weaker demand in its major markets depressed orders.
Its shares dropped after the German giant reported a 20 per cent fall in orders for the fiscal third quarter to end-June. Orders were particularly hurt by a 51 per cent slump at its previously booming power generation unit.
"The outlook is simply bad, and when you look at the order intake it is really bad," said Mr Frank Rothauge, an analyst at Sal. Oppenheim in Frankfurt. "It's all very well that Power had good profit figures, but the order intake has halved."
Falling telecom sales and earnings have dragged down Siemens over the last year, while sales in power generation, medical technology and other areas have been buoyant. Now the cushion from power generation may be deflating in the next few years as booming demand for turbines in the United States fades.
Siemens confirmed on an analysts' call that the trend was downwards for numbers of power generation turbines, even though it may see orders in the fourth quarter exceed the third based on whether contracts are booked in September or October.
Siemens said it was struggling generally with an "extremely difficult environment" and would continue with its planned restructuring programme for the group, which started last year and involves the eventual loss of over 30,000 jobs.