Siemens AG, Europe’s largest engineering company, will slow the pace of operating spending this year as the company braces for a slowdown in Europe.
The company will increase investments at a slower pace, Chief Financial Officer Joe Kaeser told Handelsblatt newspaper in an interview. Spokesman Wolfram Trost confirmed the comments, saying Kaeser was referring to operating expenditures.
Siemens’s forecast for the fiscal year ending Sept. 30 includes increasing operating expenditure to as much as 15.5 billion euros ($20.4 billion) from 14.2 billion euros last year. The company had so far forecast to increase capital expenditure by as much as 500 million euros this year.
Siemens on Jan. 24 reported first-quarter earnings that missed estimates as profitability dropped at its four main units, and indicated business will remain tough in the second quarter of its fiscal year. The Munich-based company predicted Europe will slip into recession in the coming months. Siemens forecast it will earn about 6 billion euros in profit this year.