Siemens Q3 boosted by industry, energy projects

By Nicola Leske

MUNICH (Reuters) - German engineering group Siemens (SIEGn.DE) posted stronger-than-expected third-quarter results thanks to major contracts in its two largest sectors, but is braced for a slowdown in new orders.

The results buoyed Siemens stock, which hit its highest level since March 14 and was the biggest positive weight in Germany's blue-chip DAX index .GDAXI and second-biggest in the main European index .FTEU3. Shares rose 5.2 percent to 77.01 euros by 1050 GMT.

Siemens is in the midst of a major overhaul and regrouped its divisions into three main sectors to benefit from global growth trends -- energy, industry and health care -- at the beginning of this year. It began reporting total profit for those sectors in the quarter ended June 30.

Profit for the core business grew 33 percent to 2.08 billion euros led by strong growth in the industry and energy sectors, and boosted by the booming markets for energy production.

Chief Executive Peter Loescher said on a conference call with journalists that "we have had an excellent quarter but expect to see a flattening dynamism in the coming quarters."

Siemens reiterated on Wednesday it expected revenue, excluding acquisitions, to expand twice as fast as global economic growth this fiscal year and next.

But it said it sees more challenging conditions in the global economy in fiscal year 2009, when it aims to reach a total profit for the three sectors of 8-8.5 billion euros.

Growth in income from continuing operations is expected to exceed growth in total sector profit, Siemens said, adding that all forecasts exclude any impact from worldwide probes of whether Siemens paid bribes to win contracts.