Siemens AG, Europe's largest engineering company, yesterday reported third-quarter earnings that beat estimates on increased orders for power plants and generator upgrades in Russia and China.
Siemens rose as much as 6.5 percent in Frankfurt trading, its biggest gain in more than four months, Bloomberg News reported. Net income through June 30 fell to 1.37 billion euros (US$2.1 billion) from 2.03 billion euros a year earlier, when Siemens booked a gain from a venture with phone maker Nokia Oyj, the Munich-based company said.
Chief Executive Officer Peter Loescher forecast operating profit from the biggest units will increase a minimum 20 percent in 2009 from last year after quarterly orders jumped 21 percent to 23.7 billion euros. Siemens has sold telecommunications assets to focus on power networks, electronics and scanners used in health care.
Job losses
Hired a year ago after a bribery scandal, Loescher is cutting 16,750 jobs to match the margins of General Electric Co and ABB Ltd. "Rising orders are encouraging," said Juergen Meyer, a fund manager at SEB Asset Management. "The boom in power plants will probably continue for a decade thanks to the high energy prices."
The maker of trains and Osram lightbulbs climbed 4.14 euros to 76.25 euros as of 12pm yesterday, the steepest increase since April 1. The stock has dropped 33 percent this year, reducing its value to 67 billion euros. GE has fallen 23 percent in United States trading and ABB is down 14 percent in Zurich.
Operating profit from main businesses will rise to 8-8.5 billion euros in 2009, even as the economic environment weakens. The result was 6.66 billion euros in 2007.
Loescher is the first CEO hired from outside of Siemens. He took over from Klaus Kleinfeld, who left amid allegations employees bribed clients to win contracts. The uncovering of 1.3 billion euros in "unclear payments" made from 2000 to 2006 also prompted the exit of Chairman Heinrich von Pierer.
(Shanghai Daily July 31, 2008)
