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Siemens Warns Profits To Plunge By €900m


Siemens, the German technology giant, stunned investors this morning by issuing a surprise profit warning, cutting second-quarter earning forecasts by €900 million (£689 million).

The company said that a weak performance by its energy division, as well as poor results from its transport business and the loss of a contract with the UK Department for Work and Pensions is expected to reduce earnings in the three months to March.

Two-thirds of the projected reduction in earnings was down to delayed parts delivery and a lack of qualified engineers in its fossil power division.

Siemens said the predicted cut would be “the largest piece of any additional financial burdens for 2008”.

&&&§ionName=IndustrySectorsIndustrials,mywindow,menubar=0,resizable=0,width=615,height=655); Related Links Siemens to announce 7,000 job cuts Strike threat looms over Siemens pension plan Siemens widens corruption inquiry

Shares in the industrial giant fell 13.33 per cent to €69.16 in early trading.

Todays profit warning is the latest blow to the German company after the group was investigated over alleged bribery. Siemens is cutting 7,000 jobs at its corporate telecommunications unit Siemens Enterprise Networks.

Siemens will make almost half the job cuts in Germany. The company is alleged to have paid millions of euros in bribes to cabinet ministers and officials in Nigeria, Russia and Libya.

Payments totalling some €1.3 billion (£990 million) are being investigated which, if established as fraudulent, would represent one of the world’s largest corporate bribery affairs.

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