Siemens's operating profit up

By Reuters
Updated: 11:00 EDT, 27 September 2010

Siemens's fourth-quarter operating profit is set to beat the year-earlier figure as business improves, the German engineering giant said.

Satisfactory: Siemens has forecast fiscal 2010 operating profit would be above the prior-year level of €7.47bn

'In all probability, our operating results for the fourth quarter will be very satisfactory, particularly in new orders we're seeing a further upturn in business activity,' said finance director Joe Kaeser.

Siemens said 'total sectors profit' - the operating profit of its core energy, industry and healthcare businesses - in the quarter to September will likely be above the year-earlier level of €1.9bn ($2.54 billion).

The expected fourth-quarter figure excludes an announced impairment of up to €1.4bn and includes restructuring costs of some €150m, which are less than expected.

Siemens has forecast fiscal 2010 operating profit would be above the prior-year level of €7.47bn, excluding restructuring costs and other one-offs.

Siemens said last week it would take a goodwill impairment for acquisitions of three companies that now constitute its diagnostics division.

Its fiscal year ends on September 30 and it will release its full-year results on November 11.

It bought Diagnostics Products Corp, Bayer Diagnostics and Dade Behring for around € 11bn in 2006 and 2007, but the businesses have struggled to cope with strong competition from companies like Roche.

Siemens' range of products - from turbines and fast trains to hearing aids and lightbulbs -- competes with that of General Electric, Philips, Schneider Electric and ABB and makes the German conglomerate a bellwether of the euro zone's largest economy.

Europe's No.1 engineering company in its third quarter to the end of June broke a streak of almost two years of declining sales as rising emerging market demand and a weak euro helped it swing back to growth.

German business sentiment rose unexpectedly in September to its highest level since June 2007 but it also showed the country's economic rebound was losing some pace, with exporters somewhat sceptical over developments in the United States and China.