By Christopher Alessi
MUNICH--German engineering giant Siemens AG reported a surge in
net profit in the three months to end March, driven largely by
gains it booked from the sale of its stake in a
household-appliances joint venture with Robert Bosch GmbH and the
disposal of its hearing-aid unit and hospital-information
business.
Net profit for the period, Siemens's fiscal second quarter, rose
to EUR3.89 billion ($4.41 billion) from EUR1.12 billion during the
same period last year, beating analysts' expectations. Analysts had
forecast a net profit of EUR2.01 billion, according to a recent
poll by The Wall Street Journal.
Revenue rose by 8% to EUR18.05 billion from EUR16.7 billion last
year, helped by the euro's weakness against major currencies. New
orders climbed by 16% to EUR20.75 billion, boosted by large
domestic contracts at Siemens' train business.
However, low oil prices and volatile economic conditions in some
parts of the world squeezed the group's profitability. The overall
industrial profit margin dropped to 9% from 10.3% during the same
period last year, with the power and gas division posting a profit
margin of 12.9%, down from 20.3% last year.
The Germany group's Chief Executive Joe Kaeser has faced
pressure from investors to justify Siemens's planned $7.6 billion
acquisition of U.S. oil-equipment maker Dresser Rand Group Inc.,
announced last September, which some have judged expensive as oil
prices have tumbled.
The company also announced an additional 4,500 job cuts
world-wide 2,200 of which are expected to be in Germany in the
power and gas unit and at some of the group's underperforming
businesses. Siemens is also cutting roughly 7,400 other jobs
globally.
Siemens reiterated its guidance for the 2015 fiscal year, saying
its expects to attain a profit margin for its industrial businesses
between 10% and 11%.
Write to Christopher Alessi at christopher.alessi@wsj.com
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