Siemens stock falls to lowest since 1989

Siemens AG, Europe's biggest engineering company, fell the most in at least 18 years in Frankfurt after saying order delays and cancellations will cut earnings by 900 million euros this quarter.

The Munich-based company fell as much as 14 percent to 68.76 euros, cutting Siemens' market value by about 10.4 billion euros. Siemens said yesterday it reviewed the energy, transport and technology divisions and uncovered about 600 million euros in costs tied to power-plant projects alone.

The markdown comes a month after Chief Executive Officer Peter Loescher said the company is likely to meet its earnings goals this year. Loescher, the first outsider to lead Siemens in its 160-year history, said the move is a "painful but necessary step" as he overhauls the company after his predecessor, Klaus Kleinfeld, left in the wake of a bribery scandal last year.

The shares traded at 68.55 euros as of 1:09 pm in Frankfurt. Yesterday's decline brings this year's drop to 37 percent, making Siemens the fourth-worst performer on Germany's benchmark DAX 30 Index in the period. Shares of competitors including Royal Philips Electronics NV and Alstom SA also fell.

The company reiterated its profitability targets for 2010 and said it will make "definitive progress" toward these goals next year. Until yesterday, Siemens had aimed to increase sales at least twice as fast as global economic growth this year, and raise profit from operations at least twice as fast as revenue. Loescher said yesterday he would provide a new outlook in April.

Agencies

(China Daily 03/18/2008 page17)