Siemens missed quarterly profit forecasts on Thursday and said it saw earnings flat over the full year despite finally shedding its loss-making mobile-phones unit, driving its shares down more than 3 percent. Operating profit fell by more than a quarter to 980 million euros ($1.18 billion), the German conglomerate said.
The figure missed the lowest estimate in a Reuters poll for the quarter to June as the remaining parts of Siemens's communications business and its IT services unit underperformed.
All the results and comparative figures excluded losses from the handset unit, which were listed as discontinued operations.
As well as worse-than-expected results at telecoms and IT, which were known to be problem areas, logistics unit L&A swung to a loss and posted lower sales on project charges and negative currency effects.
Chief Executive Klaus Kleinfeld said he saw this year's net profit similar to last year's on a comparable basis at around 3.1 billion euros as his so-called Fit4More profit-driving programme takes time to kick in.
"Fit4More will not produce results overnight. It requires hard work," Kleinfeld told a conference call for journalists after just five of Siemens's 12 divisions hit profitability targets - fewer than in the previous quarter.
By contrast, arch-rival General Electric - the world's biggest industrial conglomerate - has said it should increase earnings by more than 10 percent this year and beyond after posting a 24-percent rise in profit last quarter.
Siemens trades at 14.5 times 2006 estimated earnings - cheaper than General Electric, which trades at 17 times, but more expensive than Dutch conglomerate Philips Electronics at 14.2 times.
The German company hopes to do better now that shareholders of Taiwanese technology group BenQ have agreed to take over its handset unit. That deal cost Siemens 300 million euros.
Siemens, formerly the world's sixth-biggest mobile handset maker, would not say how many BenQ-Siemens phones had been sold in the quarter, referring the question to BenQ. BenQ said it would not release the numbers until the deal closed, which is expected to happen at the end of this quarter.
Siemens gave no new full-year sales outlook after raising revenues by a forecast-beating 7 percent to 18.75 billion euros in the quarter and new orders by 9 percent to 19.935 billion.
It had previously said it aimed to increase sales this fiscal year to September by more than last year's 1 percent.
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