FRANKFURT, Germany (AP) — Germany’s Siemens AG said yesterday net profit fell by half in the most recent quarter, to 1.12 billion euros, as the company saw higher taxes and falling demand for its big-ticket power turbines.
Net profit for the quarter ending December 31 last year, the company’s fiscal first, was off 49 per cent from 2.21 billion euros in the year-earlier quarter when the company booked United States (US) tax gains and saw one-time revenue from share sales. Revenue fell one per cent to 20.1 billion.
Siemens CEO Joe Kaeser cited stronger order intake as a positive for future earnings but said the company has “much to do” to achieve industry-leading profit margins across its businesses. Siemens makes power generating and transmission equipment, factory automation systems, medical scanners and trains.
The company said it still intends to complete the merger of its trains business with France’s Alstom SA in the first half of the year. The companies have offered changes in the deal to try to overcome objections from European Union (EU) competition authorities. A decision is expected on February 18.
The profit result was short of estimates for 1.15 billion euros net profit as compiled by financial information provider FactSet.
Demand for turbines to generate electricity from fossil fuels has fallen as countries and utilities move toward renewable sources of energy such as wind and solar power. The company’s power and gas division saw operating earnings fall by 50 per cent.