Siemens Quarterly Profit Declines on Charges, Demand

Siemens AG, which today promoted finance head Joe Kaeser to chief executive officer, said quarterly operating profit dropped 31 percent amid rising charges for failed train and solar energy projects.

So-called sector profit from the main health care, industry, infrastructure and energy divisions fell to 1.26 billion euros ($1.7 billion), the company said today. Sales dropped 2 percent to 19.3 billion euros. The average estimate of analysts surveyed by Bloomberg was for 18.7 billion euros.

Siemens earlier today named Kaeser as CEO to take over from Peter Loescher after Europe’s biggest engineering company repeatedly missed profit targets and charges mounted for failed power and train projects. The company, which makes products from power turbines to high-speed trains, last week said it no longer predicts an operating profit margin of at least 12 percent of sales in the 12 months through September 2014.

The company said today it expects “clear” order growth and a “moderate” decline in revenue for fiscal 2013, with earnings of 4 billion euros.

The stock was down 0.2 percent as of 12:23 p.m. in Frankfurt trading.

U.S. rival General Electric this month reported quarterly profit that beat analysts’ estimates as demand for jet engines and oil-and-gas drilling equipment drove the order backlog to a record.

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