Siemens to Oust Chief After String of Setbacks That Prompted Profit Warning

FRANKFURT — The supervisory board of Siemens, one of Germany’s largest companies, said that it would fire its chief executive at a meeting on Wednesday and replace him with an insider following a string of problems that led to a profit warning last week.

Peter Löscher, an Austrian who has been chief executive of the electronics and engineering giant since 2007, is taking the blame for a series of missteps that have plagued the company during the last year, including a late delivery of high-speed trains for the German national railroad and delays in completing offshore wind turbine projects.

The German news media reported that Joe Kaeser, a member of Siemens’s managing board and its chief financial officer, would be most likely to replace Mr. Löscher, but a company spokesman said on Sunday that he could not confirm the reports. In a statement Saturday, Siemens, based in Munich, said its supervisory board would name another member of the company’s executive board as chief executive, but it did not say who.

Siemens’s fortunes have consequences for the German economy as a whole because it is one of the country’s largest employers, with about 120,000 workers, and because it is something of a bellwether for the country’s industrial sector.

Along with automobiles, the German economy is based on the production of high-priced goods that are sold to governments and corporations. Siemens’s broad array of products includes gear for power generation, trains and other transportation equipment, and medical devices like X-ray scanners. Problems at Siemens are potentially a bad omen for the country.

On Thursday, Siemens shares plunged 6 percent after the company said it would not meet its profit goals for the fiscal year that begins Oct. 1. Siemens did not give a detailed explanation for the expected shortfall, attributing it to “lower market expectations.” But it appeared to reflect a combination of weaker-than-expected economic growth in crucial markets as well as management mistakes.

The profit warning fed concern that demand for German exports from China and other developing markets may no longer be strong enough to compensate for the weak European economy. Sales in the United States, where Siemens has 60,000 employees, also appear to be falling short of expectations despite the recovering growth in America.

Germany has weathered the euro zone crisis better than other countries because its machinery and engineering divisions have been able to tap developing markets, especially China. But recently the Chinese economy has been cooling, while Europe remains in recession.

Siemens had already reported a 7 percent decline in sales during the first three months of 2013, to 18 billion euros, or about $24 billion. On Thursday, the company is scheduled to announce earnings for the quarter that ended June 30.

Mr. Kaeser, reported as the likely replacement for Mr. Löscher, is a 56-year-old Siemens veteran credited with keeping the company on a steady course after the previous chief executive, Klaus Kleinfeld, resigned under pressure in 2007. Mr. Kleinfeld is now chief executive of the aluminum producer Alcoa.

Mr. Löscher, 55, was the latest in a line of Siemens chiefs who have tried to focus the sprawling company on its most profitable businesses and make it easier to manage. Under Mr. Löscher, Siemens spun off its Osram lighting unit, and this month it sold its half of a joint venture with Nokia that supplies equipment for mobile telecommunication networks.

Those moves raised money and simplified the company but were not enough to compensate for other problems, including delays in delivering high-speed ICE trains to Deutsche Bahn, the German railway.

Members of the supervisory board met informally on Saturday and will make the management changes formal at a regular meeting scheduled for Wednesday.

Groupon Narrows Its Loss After String of Disappointing Results

The company also reported that its net loss in the first quarter narrowed from a year earlier.

Shares of Groupon jumped 10.6 percent, or 59 cents, to $6.18 in after-hours trading.

Groupon said its first-quarter revenue rose 7.5 percent, to $601.4 million, from $559.3 million a year earlier. Groupon was expected to generate revenue of $590 million, according to analysts surveyed by Thomson Reuters.

The company posted a net loss of $4 million, or 1 cent a share, in the latest quarter, compared with a net loss of $11.7 million, or 2 cents a share, a year earlier.

Consolidated segment operating income, a closely watched measure of Groupon’s profitability, came in at $51.2 million in the latest period. Mark Mahaney, an analyst at RBC Capital Markets, was expecting this figure to be about $26 million.

Groupon’s North American revenue jumped 42 percent, while international revenue fell 18 percent.

“Revenues were slightly better than expected, with North America growth a lot better, while international is definitely still slower,” said Aaron Kessler, an analyst at Raymond James.

The company, one of the most celebrated Internet market debutantes of 2011, fired Andrew Mason, its co-founder and chief executive, in February after a string of disappointing results wiped out three-quarters of its market value. Groupon, which has lost several other key executives, is seeking a new permanent chief executive.

Ted Leonsis, the company’s interim co-chief executive, said on Wednesday that Groupon’s board had formed a special committee that had begun a search for a new chief.

Groupon’s current leadership team is “gelling very very nicely,” giving the search committee more time to find “the ideal long-term C.E.O.,” Mr. Leonsis said in a conference call with analysts and investors.

Groupon shares hit a record low late last year, but have rallied strongly since then, partly because Tiger Global, a top technology-focused hedge fund firm, took a stake of about 10 percent in the company.

Under Mr. Leonsis, and his counterpart, Eric Lefkofsky, Groupon is trying to turn around its struggling European business, while continuing to expand in the United States. Analysts expect a slimmed-down company under the new leadership.