Wind turbine problems weigh on Siemens fourth-quarter profit
Resource from: Reuters Likes:154
Nov 06,2014
BERLIN (Reuters) - German engineering group Siemens missed expectations for fourth-quarter core profit, hurt by charges for faulty wind turbines that pushed its wind power division to a loss.
Siemens, one of Germany's biggest companies and a major exporter of goods from trains to turbines to hospital equipment, posted total sectors profit up 28 percent to 2.2 billion euros ($2.76 billion), missing the average estimate of 2.25 billion euros in a Reuters poll.
Profit at Siemens' energy unit tumbled 28 percent, overshadowing strong results from the group's other divisions: healthcare, industry and infrastructure & cities.
The Munich-based firm forecast flat sales for the current year and targeted an industrial profit margin of 10-11 percent, a new benchmark as it seeks to close a profitability gap with rivals under Chief Executive Joe Kaeser, who took over in 2013.
The goal compares with Swiss rival ABB's 14.3 percent operating margin in the third quarter, and General Electric's 16.3 percent industrial margin.
Siemens aims to fix or dispose of underperforming businesses such as baggage-handling and transmission systems, in some cases beefing them up with acquisitions like the recent $7.6 billion purchase of U.S. oilfield equipment maker Dresser-Rand.
On Thursday, it said it had agreed to sell its hearing-aid unit to private equity firm EQT [EQT.UL] and Germany's Struengmann family for 2.15 billion euros, and would keep a 200 million-euro equity stake in the business.
Fourth-quarter orders rose 2 percent to 20.7 billion euros, beating expectations, but like-for-like order intake from emerging markets fell 14 percent.
Sales were flat at 20.6 billion euros, while net profit jumped 40 percent to 1.5 billion. Siemens said it would raise its dividend by 10 percent to 3.30 euros per share.
(Reuters)
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