UPDATE 2-Siemens sees weaker Q2 vs Q1, outlook brightens

* CFO Kaeser says Siemens to post “robust” Q2 profit

* Says Q2 new orders likely lower than Q1

* Says Q2 Industry Sector profit seen up year-on-year

* Shares down 0.5 percent

(Adds comment, background)

FRANKFURT, March 26 (BestGrowthStock) – German industrial
conglomerate Siemens (SIEGn.DE: ) said second-quarter operating
profit and new orders would weaken from the first quarter
despite a brighter outlook for its core business.

Finance director Joe Kaeser also reiterated on Friday that
Siemens would review the outlook for its 2009-10 year to
end-September at the end of March.

Europe’s largest engineering group has been using cost cuts
to absorb an economic slump that continues to weigh on
businesses with long manufacturing lead times, even as customers
with short business cycles rebound.

“Siemens is benefiting from the timely and correct measures
taken,” Kaeser said in an analyst presentation, referring to
cuts in administration and sales costs it has made.

“There are still signs of recovery” in short-cycle
businesses like light bulbs and factory automation but many
businesses in the energy sector and some divisions at industry
are still beset with challenges, he said.

The world’s biggest producer of industrial robotics stunned
markets in January with strong first-quarter results, prompting
analysts to suggest it might revise up its profit guidance for
the year. [ID:nLDE60P0E9]

Siemens has said it expected a 2009-10 operating profit of
6.0-6.5 billion euros ($8.0-8.7 billion), down from 7.5 billion
in 2008-09. It achieved about a third of the forecast figure in
the first quarter.

The breadth of its products — from turbines and fast trains
to light bulbs and hearing aids — makes Siemens a bellwether of
the euro zone’s biggest economy, which emerged from its deepest
post-war recession in the second quarter of last year.

Siemens shares were down 0.5 percent at 73.35 euros at 1100
GMT, while the DAX blue-chip index (.GDAXI: ) was off 0.3 percent.


Its Industry business, which generates almost half of group
sales and competes with ABB (ABBN.VX: ), Alstom (ALSO.PA: ) and
General Electric (GE.N: ), bore the brunt of the recession.

Operating profit in the March quarter at Industry was
expected to be higher year-on-year but be below the prior
three-month period, Kaeser said.

Operating profit at all three sectors, including Energy and
Healthcare, was also set to rise year-on-year but be lower than
in the December quarter.

Analysts said conditions in manufacturing markets remained
tough, but there were signs of stabilisation amid continuing
difficulties in the processing and construction industries.

German engineering new orders fell 3 percent in January
after rising in December for the first time in 15 months, with
engineering industry association VDMA forecasting flat output
this year. [ID:nLDE6190Z6]

Industry sector chief executive Heinrich Hiesinger said at
the same event the business’s margin in 2009-10 was “expected to
be just above 9 percent and at the low end of its margin
target”. The sector’s target is a margin of 9-13 percent. In
2008-09, the margin fell to 7.7 percent from 10.5 percent.

Investing Research

(Editing by Dan Lalor)
($1 = 0.7502 euro)

UPDATE 2-Siemens sees weaker Q2 vs Q1, outlook brightens