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BERLIN (Reuters) - New Siemens (SIEGn.DE) Chief Executive Joe Kaeser promised shareholders a big share buyback on Thursday, but asked for more time to produce a new strategy as he aims to steady the industrial giant after a boardroom battle.
Kaeser, a conservative former finance chief who got the top job when his predecessor was pushed out in July, tried to dampen expectations for the turnaround plan which he said would be presented in May.
But his announcement that Siemens, whose products range from gas turbines to fast trains and ultrasound machines, would buy back 4 billion euros' (3.4 billion pounds) worth of its own shares sent the company's stock to a 5-1/2 year high.
Some investors had hoped Kaeser would give at least a glimpse of how he planned to turn around Germany's second-biggest company by market value when he presented quarterly financial results for the first time as CEO.
However, Kaeser appeared anxious not to follow his fallen predecessor, Austrian Peter Loescher, who raised expectations only to miss ambitious targets repeatedly at the 166-year-old company.
Kaeser played down the scope of next May's strategy, which he will explain only after nine months as CEO. "I don't want to present half-finished things," he told reporters at Siemens' former headquarters in Berlin, 99 days after taking the helm.
"We just want to explain what the company will look like after 2014," added Kaeser, who has worked for more than three decades at Siemens.
The share buyback helped to ease any disappointment among investors. Shares in the engineering group rose to their highest level since early 2008 in response, and were up five percent at 97.16 euros at 1356 GMT.
Under Loescher, Siemens lost ground to competitors such as Switzerland's ABB ABBN.VX and U.S.-based General Electric (GE.N) in terms of profitability due to a focus on sales growth as well as poor project management that resulted in a series of costly charges.
He was forced to put on the back-burner a strategy to increase annual sales by about a third to 100 billion euros last year, announcing instead a plan to save 6 billion euros over two years.
Siemens operating profit from its four main businesses - Industry, Energy, Healthcare and Infrastructure & Cities - dropped 20 percent to 5.79 billion euros in its financial year that ended in September.
This was due largely to 1.3 billion euros ($1.8 billion) in charges related to the savings programme, plus project charges.
Years of breakneck expansion, including an ill-fated move into solar energy which led to a billion-euro loss, have left Siemens in disarray. Former Deutsche Bank chief executive Josef Ackermann resigned in September from the supervisory board after a tussle with fellow members over Loescher's dismissal.
Loescher was forced to issue two profit warnings, hitting the share price. However, since Kaeser took over, Siemens' stock has outperformed the market with a 13 percent gain, reflecting investors' hopes that he will do a better job at turning the firm around.
At the same time, many companies are facing a dearth of large orders as industrial customers delay spending in a weak global economy.
As a result, Kaeser gave a conservative sales forecast for the current financial year to September 2014. These would be unchanged from 75.9 billion euros in 2012-13.
Analysts expect much more, estimating on average a 4 percent rise in revenue and a 31 percent increase in earnings, according to a Reuters poll.
"We are not surprised to see Siemens start the year with conservative guidance," Commerzbank analyst Ingo-Martin Schachel said, adding that after the profit warnings of recent years it would be positive if Siemens could start out low and raise its guidance mid-year.
Kaeser promised that cost cuts would start having an effect on profits in the current fiscal year to September 2014, saying earnings per share would rise at least 15 percent from last year's 5.08 euros, more than double the 7.2 percent growth rate of fiscal 2013.
Core operating profit margin will widen by 2 to 3 percentage points after shrinking to 7.5 percent from 9.3 percent the previous year, he said.
($1 = 0.7392 euros)
Editing by Noah Barkin, Sophie Walker and David Stamp