German engineering conglomerate Siemens slashed its full-year profit forecast yesterday after incurring another major charge related to delayed offshore wind power projects in the second quarter.
The cut was slightly less than analysts feared, however, as the charge was offset by a better-than-anticipated performance at the group's core industrial and healthcare businesses.
"We now see a very low probability that Siemens will need to cut guidance again, see lots of bad news priced in and upgrade the stock to 'Add'," WestLB analyst Thomas Langer said.
Shares in Germany's biggest company by market capitalisation were up 1.5pc at €70.86.
Siemens now sees net profit from continuing operations for its 2011/12 year to end-September at €5.2-5.4bn, down from a previous outlook for €6bn and compared with analysts' consensus forecast of €5.2bn.
Core net profit dropped by two-thirds to €1.05bn in the second quarter, just above analysts' average estimates.
That included a €278m charge for wind project delays, which surprised analysts after a big hit in the first quarter as well. News of the charge came a day after Siemens named a new chief for the affected Power Transmission division, replacing former CEO Udo Niehage.
"We have to admit that there was a lack of competence," finance chief Joe Kaeser said.
"At the end of the day, this is a highly complex process, including engineering, shipbuilding and major challenges you have to discuss with regulators."
Quarterly profit was also hit by an expected €640m charge related to Nokia Siemens Networks, the loss-making telecom equipment vendor Siemens owns with Nokia.
The decline was cushioned, however, by robust demand for automation systems and industrial software, and a smaller than expected decline in profits from the sale of healthcare equipment such as MRI scanners and radiation machines.
Siemens is a bellwether for the eurozone's biggest economy.
New orders slumped by 13pc to €17.88bn in the second quarter, missing a forecast €20.14bn, as Siemens won fewer contracts in Germany, India and China. The group, which does a third of its business in emerging markets, said orders should improve in its fiscal second half.