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'The Global Recovery Is Over': Siemens CEO

Thursday, 28 Jul 2011 | 5:29 AM ET

Siemens, the German engineering and power giant, on Thursday posted third-quarter earnings that missed analyst forecasts blaming a slowdown in the global economy for the drop in profits.

Adam Gault | Getty Images

“What we see is the early tail wind of the global recovery is over. We have Europe within the debt crisis and budget discussion in the U.S. and volatile commodity prices and political situations around the world. Although we continue to see a growth story in emerging markets,” Siemens chief executive Peter Löscher told CNBC.

“Siemens continues to operate in robust end markets, but we also see a deceleration of the growth market around the world and see also see a lot of volatility. But we are well placed in the markets we serve,” Löscher added.

Siemens reported a fall in third quarter net profitof 47 percent to 763 million euros ($1.09 billion) as a number of one off charges hit the bottom line. The firm's results also fell short of forecasts as profit from healthcare sagged.

Analysts had expected third quarter net profit to fall by a third to around 1 billion euro’s following a news that rival ABB’s profits where hit by rising commodity prices in the current quarter.

Siemens senior management have warned that growth will slow in the second half of the year on several occasions already this year and the firm maintained this outlook in its earnings statement.

Global Recovery is Over: Siemens CEO
"What we see is that the early tailwind of the global recovery is over," Peter Loescher, CEO of Siemens told CNBC after the company saw a fall in third quarter net profits.

Löscher also confirmed the planned flotation of its lighting and semiconductor business, Osram, for the fourth quarter. He said that the company's rail business had just won a multi-billion dollar deal in Russia. It has also been confirmed as the preferred bidder for the UK’s new Thameslink rail line in London and has had the validity of its bid for Eurostar confirmed, he said.

Meanwhile, on China, Löscher remained optimistic that the recent rail crashwould have a minimal impact on Siemens’ business, adding the Chinese government remained committed to high speed rail as part of its urban infrastructure plans.

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