German industrial giant Siemens said Tuesday that bottom-line profits were down in the first three months of the current business year as customers delayed projects due to the debt crisis.
"The uncertainties of the ongoing debt crisis have left their mark on the real economy," Siemens chief executive Peter Loescher said in a letter to shareholders.
"Our revenue increased again, while certain project delays burdened profits. Although a recovery is expected in the second half of the year, we must work hard to achieve our goals," Loescher said.
Siemens runs its business year from October to September and in the three months to December, net profit amounted to 1.44 billion euros ($1.9 billion), it said.
That represented a drop of 16.2 percent from the same period a year earlier.
It the same time, first-quarter revenues rose by 3.0 percent to 17.9 billion euros while new orders declined by 4.0 percent to 19.81 billion euros, Siemens said.
Finance chief Joe Kaeser told a news conference that Siemens had observed a noticeable reluctance on the part of its clients to place orders in the second half of last year.
"But we're working on the assumption that, with the solutions at hand, the situation will calm down," he said.
Nevertheless, 2012 "will not be an easy year," warned chief executive Loescher.
The current second quarter, the period from January to March, would remain difficult. But "things will gradually improve after that... (even if) the targets we have set ourselves have become ambitious," Loescher said.
For the current business year, Siemens is projecting modest revenue growth of 3.0-5.0 percent and stable net profit of around 6.0 billion euros.
The group makes a wide range of products, from trains and trams to medical apparatus and power turbines.
New orders declined in all sectors except the healthcare sector, with orders in the energy sector dropping as much as 11 percent in the first quarter.
In terms of region, while Europe was facing a possible recession, Siemens was setting its sights on the United States and on the emerging markets as the "engine of growth," Loescher said.
In all, Siemens had an order backlog of more than 100 billion euros and a "strong financial position," the chief executive said.
On the Frankfurt stock exchange on Tuesday, Siemens shares were the biggest losers, showing a loss of 3.19 percent at 75.9 euros.