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Siemens First-Quarter Profit Increases 17% on Train, Wind-Power Growth

Siemens AG, Europe’s largest engineering company, said fiscal first-quarter profit increased as the manufacturer delivered more industrial automation equipment and wind turbines.

Profit excluding acquisitions or disposals increased 17 percent to 1.79 billion euros ($2.44 billion) in the three months through December, Munich-based Siemens said today. The company reiterated that profit from continuing operations will rise by 25 percent to 35 percent for the year ending Sept. 30.

An economic recovery in its home market and growth abroad have increased demand for Siemens’s industrial products. The company won its largest order for onshore wind turbines to date in the quarter, and Siemens said earlier this month that it’s on track to meet its full-year earnings targets.

Business confidence in Germany, Europe’s biggest economy, rose to a record high in January as exports to Asia boomed and domestic consumer spending grew, the Munich-based Ifo institute said on Jan. 21. Germany’s economy expanded at a record 3.6 percent last year. The VDMA machine makers’ association said on Jan. 12 that plant and machinery orders at the country’s manufacturers jumped 43 percent in November from a year earlier.

Beating Estimates

First-quarter net income rose 16 percent to 1.72 billion euros, Siemens said. Sales rose 12 percent to 19.49 billion euros, while new orders increased 19 percent to 22.59 billion euros. The renewable energy division led revenue gains with an 81 percent increase, and the fossil power generation unit propelled growth in sales contracts. Sales, order intake and profit exceeded estimates from analysts polled by Bloomberg.

Siemens, which reiterated a forecast of “moderate” sales growth, is narrowing its focus as Chief Executive Officer Peter Loescher disposes of assets. The company is hosting its annual shareholder meeting in Munich today.

In December, the German company, the country’s largest by market value, sold its computer-services unit to Atos Origin SA of France as well as its 49 percent stake in armored-vehicle maker Krauss-Maffei Wegmann GmbH to partner Wegmann Group. Siemens’s remaining divisions make products such as medical scanners, high-speed trains, light bulbs and power turbines.

The computer-services disposal resulted in an impairment charge of 136 million euros in the quarter, Siemens said.