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Siemens Posts First-quarter Rise in Orders; Net Hurt by Fine

Germany's Siemens posted a 4% rise in first-quarter new orders on Thursday despite an exceptionally strong year-ago quarter but net profit was dented by a hefty cartel fine from the European Commission.

Orders rose to 24.582 billion euros ($31.97 billion), driven by Siemens' industrial units Power Transmission and Distribution, Power Generation and Industrial Solutions and Services, Siemens said in a statement.

Net profit fell 16% to 788 million euros in the quarter to end-December, including a negative effect of 423 million euros from the cartel fine, but also a significant positive effect from a switch to IFRS accounting.

Chief Executive Klaus Kleinfeld said he "firmly believed" all the group's divisions would meet profitability targets this quarter.

Despite investigations into corruption at the company that are likely to produce a stormy shareholder meeting later on Thursday, the company pressed on with reshaping its portfolio, announcing a major acquisition and a disposal late on Wednesday.

Siemens said it would buy U.S. industrial design software maker UGS Corp. for $3.5 billion to beef up its factory-automation unit A&D and that it planned an initial public offering of part of its automotive unit, VDO.

Siemens' healthcare unit, Medical, was once again the group's most profitable during the first quarter, posting an operating profit margin of 14.5%. A&D's profit margin was 13.3%, while VDO's slipped to 6.0% from 6.4% a year earlier.

IT service unit SBS posted its first profit for two years, of 24 million euros.

Institutional shareholder advisory body ISS added its voice to those of retail shareholder associations on Wednesday in calling for Siemens investors to withhold their approval of Siemens' boards at the annual meeting, which starts at 0900 GMT.