Shares in the conglomerate, whose products include trams, turbines and telecommunications equipment, plummeted on the news. Its US traded shares were down 16 percent on the New York Stock Exchange, shedding $19.64 to $104.90 in afternoon dealings after the company's stock fell 17 percent in Frankfurt.

The profit warning was a surprise from Siemens, which said in January it expected its revenue to grow at double the pace of the global economy during its current fiscal year. It reported a first-quarter net profit of nearly 6.5 billion euros ($10.1 billion) compared to 788 million euros in the same period a year earlier.

The Munich-based company, whose current quarter ends March 31, said "the large number of turnkey projects that have accumulated since 2004 has had an adverse effect" on its fossil power generation division.

It also said it was hampered by delays in recruiting experienced project engineers. Siemens said its IT unit suffered the loss of a major order in the UK from a customer it did not identify.

The company said, however, that it expected that the earnings shortfall this quarter "represents the largest piece of any additional financial burdens for 2008."

Last month, Siemens said it would reorganise its corporate telecom unit as it prepares to get out of the business, eliminating 3,800 jobs while transferring another 3,000 to partners or other units - its biggest cuts in years.

Later yesterday, the company said chief executive Peter Loescher and chief financial officer Joe Kaeser had spent a combined 3.5 million euros ($5.5 million) to buy Siemens shares.

"I am convinced that with the restructuring of Siemens, we have set the course for a positive future," Mr. Loescher said in a statement.