May 7, 2014 / 5:13 AM / in 4 years

Siemens Q2 profit disappoints on energy charges

BERLIN, May 7 (Reuters) - German engineering giant Siemens posted a weaker-than-expected 16 percent increase in operating profit on Wednesday, hit by charges in its power transmission business.

The Munich-based firm, which released details of a long-awaited corporate reorganisation late on Tuesday, said total sector profit, or operating profit, for the quarter ending March 31 came in at 1.57 billion euros ($2.18 billion) on revenues of 17.45 billion.

According to a Reuters consensus, analysts had expected profit of 1.7 billion euros on revenues of 18.1 billion.

“The second quarter showed that we still have a lot to do to improve our operating performance,” said Chief Executive Joe Kaeser, whose overhaul of the company includes plans to spin off Siemens’s hearing aids business and streamline its divisional structure.

“Nevertheless we are on course to reach our targets for the fiscal year,” he said.

Profit in the energy sector tumbled 54 percent to 255 million euros, largely due to 310 million euros in project charges related to two high-voltage direct current transmission (HVDC) projects in Canada.

Kaeser took the reins of the company last summer following the ouster of Peter Loescher. The earnings and strategic revamp come as Siemens mulls a formal offer for the energy business of French rival Alstom, which has already received a bid from U.S. giant General Electric.

$1 = 0.7177 Euros Reporting by Noah Barkin

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