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Siemens profit drops to $719 million

Siemens profit drops to $719 million

July 28th, 2011 in News

FRANKFURT, Germany (AP) - Industrial machinery maker Siemens saw quarterly net profit fall sharply due to a large charge for leaving its nuclear joint venture with Areva SA.

Earnings for the quarter that ended June 30 fell to (euro) 501 million ($719 million) from (euro) 1.4 billion in the year-earlier period.

Revenue increased 2.4 percent to (euro) 17.844 billion, short of market expectations for (euro) 18.2 billion.

Chief executive Peter Loescher, who on Wednesday was given a five-year extension of his contract, said the company was still on track to meet its 2011 targets despite an uncertain global economy and cited a sharp rise in new orders, including a (euro) 3.7 billion order for high-speed trains in Germany.

"Our markets are still robust, although risks are tending to increase in the global economic environment," he said in a statement.

The company took more than a billion euros in one-time charges. Earnings were reduced (euro) 682 million by an arbitration award after it decided to end its nuclear cooperation with France's Areva SA and seek another partner.

It also took a (euro) 382 million writeoff after reevaluating the commercial feasibility of using its particle therapy machines for general patient treatment.

Munich-based Siemens makes heavy industrial equipment such as trains and streetcars, power generation and transmission equipment, and medical diagnostic machinery.