Siemens reports consensus-missing quarterly earnings and announces a management sweep-out at its power and gas business. As Hayley Platt reports it's been hit by price pressure and production overcapacities, as well as the healthcare division.
It's one of Germany's biggest firms. But lower oil prices and disappointing margins in its healthcare division have hit profits at Siemens - it missed first-quarter forecasts. Its power and gas division fell 4 percent from a year ago. Healthcare was down by 13 percent thanks to weak orders in Asia. And turbine-making was down 39 percent, partly due to over production. New orders also fell lower than forecast. The news knocked shares by 3 percent. Joe Kaeser is the group's chief exec. SOUNDBITE: Joe Kaeser, CEO, Siemens, saying (German): "The global situation depends on factors which are clearly not all under our control. Therefore it is even more important for us to concentrate on the things which we can influence ourselves. This means the realignment of our business operations, and obviously also an improvement in operative performance." Siemens has been expanding by buying up smaller energy companies. The problem is energy prices have been falling and utility companies cutting back. Kerry Craig is from JP Morgan. (SOUNDBITE) (English): KERRY CRAIG, GLOBAL MARKETS STRATEGIST, JP MORGAN, SAYING: "I think that any company that is going into a more mature industry needs to be innovative it needs to be able to fight off those competitors but we're seeing a lot more of that M&A activity as they come try and build out through inorganic growth rather than organic growth, it just happens that the timing wasn't right for Siemens." Another euro zone giant has also been suffering - weak consumer demand is the problem at Dutch electronics group Philips. It too has reported a bid drop in fourth-quarter earnings. And says it's unlikely to hit its financial targets for the next two years. But there is one global factor which could help both firms - a weaker euro may boost foreign earnings.