Siemens: Q3 earnings up, but cautious on outlook

[July 26, 2012]  BERLIN (AP) -- Industrial conglomerate Siemens AG reported a 70 percent increase in earnings for the April-June period, but the figures released Thursday fell short of expectations and the company said that reaching its full-year target has become "clearly more ambitious" as the global economy's troubles mount.

The Munich-based company reported net earnings of euro823 million ($996 million) for its fiscal third quarter -- up from euro462 million a year earlier. Analysts surveyed by FactSet, however, had expected a much more robust increase to euro1.29 billion.

Siemens, whose wide range of products includes everything from trams to power-station turbines, said revenues rose to euro19.54 billion from euro17.84 billion, a 10 percent increase, helped by a solid order backlog and by positive currency-translation effects. The euro has declined lately amid worries about the eurozone debt crisis.

But new orders declined 23 percent to euro17.77 billion from euro22.94 billion -- depressed by a lower number of large-scale orders like one from Germany's national railway last year for a new fleet of long-distance trains. The company said it had an order backlog totaling euro100 billion in the quarter.

"The deceleration of the world economy has increased in the past few months," CEO Peter Loescher said in a statement. "We see growing reluctance among our customers regarding capital expenditures and stronger economic headwinds, especially in our industrial short-cycle businesses."

Loescher said that the company's main focus is currently on increasing its productivity and efficiency.

Siemens said it still expects "moderate organic revenue growth" for the full fiscal year but cautioned that reaching its target of euro5.2 to euro5.4 billion in income from continuing operations "has become clearly more ambitious" in view of results in the first nine months.

Siemens lowered that target in April from the previous euro6 billion because of expected charges at its energy transmission business.

The company said that, "given the difficult capital market environment," it now plans to publicly list light bulb maker Osram via a spinoff to Siemens shareholders. It had long planned an initial public offering, which was once planned for the fall of last year but delayed due to market volatility.

[Associated Press]

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