Siemens Posts Higher Profit In Q3, Appoints Finance Chief Joe Kaeser As CEO

(RTTNews) - German industrial conglomerate Siemens AG (SI) Wednesday reported a higher profit for its third quarter, that reflected a gain from discontinued operations. Separately, the company said it promoted Chief Financial Officer Joe Kaeser as its new President and Chief executive, with effect from August 1. The company said its present CEO Peter Löscher is resigning and leaving the board by mutual agreement.

Siemens' third quarter included an income from discontinued operations totaling 94 million euros, while the prior year had a loss of 382 million euros. Income from discontinued operations related to Siemens IT Solutions and Services was a positive 47 million euros in the recent quarter, while it was a negative 10 million euros in the prior-year quarter.

For the fiscal year 2013, it anticipates clear organic order growth and still sees a moderate decline in organic revenue.

For the third quarter, the company posted net income attributable to shareholders of 1.07 billion euros or 1.26 euros per share, higher than 743 million euros or 0.84 euros per share in the previous year.

Announcing its preliminary results, the company said its earnings from continuing operations declined to 1.15 euros per share from 1.27 euros per share a year ago.

For the recent quarter, the company recorded earnings from discontinued operations totaling 0.11 euros per share, while the prior-year quarter had a loss of 0.43 euros per share. Siemens said it has adjusted its prior-year results for effects of adopting IAS 19R.

Total Sectors profit declined to 1.26 billion euros, mainly due to third-quarter charges totaling 436 million euros for the Siemens 2014 productivity improvement program.

Revenues for the quarter declined 2 percent to 19.25 billion euros from 19.54 billion euros reported last year.

New orders climbed 19 percent year-on-year to 21.14 billion euros, mainly due to a major contract win for the company's train business in the UK in the Infrastructure & Cities Sector. As at the end of the quarter, order backlog for all sectors totaled 102 billion euros.

For fiscal 2013, Siemens still expects income from continuing operations of 4 billion euros, including solar business and NSN. This outlook excludes other significant portfolio effects and legal and regulatory matters in the fourth quarter, the company added.

Charges related to Siemens 2014 program in the Sectors are expected to total about 1.0 billion euros for the full fiscal year.

The company said its supervisory board has unanimously decided to designate Kaeser as new CEO and has accepted Löscher's resignation. Kaeser was CFO of Siemens since May 1, 2006. He joined the Components Group of Siemens in 1980. According to the firm, a new CFO will be appointed in due course.

There were reports that Siemens was likely replace Löscher this week after it missed profit targets and issued a profit warning recently.

Last Thursday, Siemens said it no longer expects to achieve a total sectors profit margin of at least 12 percent by fiscal 2014, citing lower market expectations. The profit margin target was part of the company's objective in the Siemens 2014 program that was announced in November 2012.

Loescher, joined Siemens as President and CEO in July 2007 from drug maker Merck & Co. Inc. (MRK). However, Siemens has been repeatedly missing profit targets ever since Loescher assumed the company's helm.

SI closed Tuesday's regular trading at 106.52 on the NYSE. In Wednesday's pre-market, the shares are currently down 0.65 percent.