German engineering company Siemens has reported a worse than expected 10 percent drop in quarterly industrial profit and signalled a tough year ahead as it restructures its turbine and wind power businesses. As Sonia Legg reports, some staff fear for their jobs.
If Germany is the euro zone's engine then Siemen's is in the driving seat of both. The engineering firm is one of the region's largest. And an unexpected 10 percent Q4 drop in industrial profit to 2.2 billion euros hurt. Shares fell almost 2 percent to two week lows. (SOUNDBITE) (German) SIEMENS CEO, JOE KAESER, SAYING: "Demand will markedly decrease and will be directed towards Asia, Latin America and Africa. This is why here too, we will do what has to be done and adapt our capacities carefully." Siemens is already shedding operations in an attempt to turn itself into an industrial software company. It's listing its health care business and its wind and rail businesses into joint ventures. And there were plenty of positives - revenue was up 1 percent and orders up 16 percent. (SOUNDBITE) PANMURE GORDON, CHIEF ECONOMIST, SIMON FRENCH, SAYING: "Siemens and companies like it have a lumpy product profile. Some of the sales are quite lumpy quarter on quarter. I don't think we should read too much into this. This has been a a strong performance. The growth prospects for the company remain very, very much intact." But profit from Power and Gas, Siemens' second-biggest business line after healthcare, plunged 40 percent due to overcapacity and falling prices. And some employees are worried. (SOUNDBITE) (German) IG METALL UNION SPOKESMAN, HAGEN REIMER, SAYING: "We want to show that while Mr. Kaeser is presenting brilliant figures for Siemens for the past business year, there are considerable problems. Thousands of employees currently fear for their jobs." It's only media reports so far fuelling the job fears. But Siemens has scheduled a meeting with labour representatives for next week.