Siemens Reports Quarterly Profit Up 27%

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Saturday, August 2nd, 2014
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German industrial giant Siemens posted a jump in quarterly profits, despite troubles in its energy sector and the impact of a strong euro.

Siemens, which runs its business year from October to September, slightly beat analyst forecasts by posting a 27-per cent increase in net profit for the third quarter to 1.37 billion euros ($A2.05 billion).

Germany’s second-largest company by revenue also confirmed its guidance for the fiscal year.

The electrical and engineering giant predicted 2014 revenues to remain level year-on-year with earnings per share up at least 15 per cent.

The company said in a statement that “headwinds from the strong euro held back the development of orders and revenue”, with a revenue decline of 3.7 per cent to 17.9 billion euros.

Profit rose at Siemens’ industry and infrastructure divisions, but they fell in the energy division.

“While we made good progress in most areas, the energy sector poses a continued challenge in the quarters to come,” said chief executive Joe Kaeser, amid grid connection problems with an offshore wind-farm in the North Sea.

The results came after Siemens in June lost in a bidding war with General Electric for a stake in France’s Alstom.

The industrial giant also expressed concern about the potential impact of international crises.

“Geopolitical tensions in Ukraine and the Middle East represent a serious risk to European growth,” warned Kaeser during a conference call.

Even if the group is very active in Russia, where its activities generate two billion euros in turnover, Western sanctions against Moscow “will have little impact on the business in 2014,” said Kaeser, but said it was too early to talk about their impact in 2015.

Siemens’ efforts were greeted at the Frankfurt stock exchange, where around (1900 AEST) its shares had gained 1.2 per cent to 93.82 euros.

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