Battered by a slowing economy, problems in its power generating unit, and an ongoing corruption scandal, German industrial giant Siemens AG reported a 67% plummet in second-quarter net profit to €412 million from €1.26 billion in the year-earlier period. Sales for the quarter, ended March 31, stagnated at €18.09 billion, barely up from €18 billion a year ago.
The power generation group alone lost €221 million compared with a profit of €330 million a year earlier, as revenue fell 5% to €2.9 billion.
Although the company lost money in power generating, transportation systems, and IT solutions and services, units that sell manufacturing technologies fared better. For instance, profits surged 35% in the automation and drives division, to €712 million on 15% growth in sales to €4.3 billion. These industrial divisions sell the company’s automation and control products, as well as its recently acquired product lifecycle manufacturing (PLM) software to the likes of Volkswagen, Nissan, General Electric, Procter & Gamble, and Nikon to help cut manufacturing costs and time to market.
Siemens reorganized in January, combining myriad divisions into three main sectors: Industry, Health, and Power. It will start reporting along the new lines next quarter.