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Siemens sticks to outlook despite softening markets

German trains-to-turbines group Siemens stuck to its full-year outlook, saying on Thursday it expected a strong fourth quarter despite a softening market outlook.

The Munich-based group said it still expected a profit margin of 10-11 percent from its industrial businesses after reaching a margin of 9.5 percent in its fiscal third quarter to end-June.

"We expect to maintain our momentum with a strong closing quarter for fiscal 2015," Chief Executive Joe Kaeser said.


Ralph Orlowski | Bloomberg | Getty Images

Quarterly results beat expectations with orders down 5 percent, sales down 3 percent and net profit down 2 percent on a comparable basis.

Industrial business profit rose 1 percent to 1.82 billion euros ($2 billion), beating the company's own consensus for 1.7 billion euros, as a strong performance at healthcare and its core automation unit outweighed weakness in turbines and trains.

Siemens has responded to poor demand, especially at its energy operations,by cutting more than 12,000 jobs, about 4 percent of its workforce. It bookedpersonnel restructuring charges of 274 million euros in the quarter.

At Siemens' power and gas unit, orders fell 22 percent, revenue fell 15 percent and profit fell 47 percent.

The unit, which has just closed the $7.6 billion acquisition of U.S.oilfield equipment maker Dresser-Rand, has been hurt by weak demand, Germany's switch to renewable energy and falling oil prices.

Finance chief-turned-CEO Joe Kaeser, who has run Siemens for almost two years, introduced the industrial margin measure as a way to benchmark the company against competitors whose margins it would like to emulate.

U.S. arch-rival General Electric improved its industrial profit margin to 16.2 percent last quarter, while Swiss power and automation firm ABB's core operational margin was 11.7 percent.


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