Why did this happen?

Please make sure your browser supports JavaScript and cookies and that you are not blocking them from loading. For more information you can review our Terms of Service and Cookie Policy.</s>German trains-to-turbines group Siemens plans a public listing of its $15-billion (12 billion pound) health care business, it said on Thursday, in a further step to focus on its core strengths of factory automation, industrial software and energy technology.

Executives signalled that Siemens would initially hold on to a majority of the business, which will need increased investments in coming years, but would not commit to how much it might want to float or when.

“We want to control it, to direct it,” Chief Executive Joe Kaeser told Bloomberg TV.

The move, which follows a carve-out of the business from the rest of the group, takes Siemens in a different direction from global rivals General Electric and Philips, who are doubling down on health care as they shed financial services and lighting respectively.

The news overshadowed a cautious outlook for the current fiscal year and a large drop in fourth-quarter orders, lifting Siemens shares 3.6 per cent to a two-month high, outperforming a 1.3 per cent rise in the German blue-chip DAX.

“Sentiment could be helped by the announced Healthcare listing,” UBS analysts wrote in a note, calling fourth-quarter profits in-line, orders weak and 2017 guidance below expectations. They kept their “neutral” recommendation.

Siemens has in past decades carried out partial listings, spin-offs, joint ventures and outright sales of its units as it exited the semiconductor, lighting, automotive and communications businesses, among others.

Siemens said it expected a modest rise of 1-2 per cent in sales in its current fiscal year to end-September, and for orders to outpace revenues, provided that the market environment for high-margin, short-cycle businesses stabilizes.

For Siemens, that means its industrial software unit Digital Factory, its most profitable unit excluding Healthineers. Oil and gas-dependent Process Industries and Drives, its other short-cycle business, was the only unit to miss its profit target in the quarter.

“Current geopolitical developments require our attention to a particularly high degree,” Kaeser told a news conference at the group’s Munich headquarters. “We continue to anticipate headwinds for macroeconomic growth and investment sentiment in our markets.”

Kaeser said, however, that the shock victory of Donald Trump in the U.S. presidential election could have a silver lining for Siemens, given Trump’s campaign promises to rebuild infrastructure and despite his anti-globalization rhetoric.

Siemens makes $22-billion or a quarter of its revenue in the United States.

“Give him a chance, let’s see what we can do together and take the positive out of it,” Kaeser said in an interview on Bloomberg TV.

For its fourth quarter, Siemens reported an 18 per cent rise in net income to €1.18-billion ($1.29-billion), in line with expectations, and flat industrial business profit of €2.45-billion that beat the average estimate of €2.41-billion in a Reuters poll.

But a 13 per cent drop in order intake to €20.3-billion – which Siemens put down to a tough comparison with the year-ago period when it won large contracts including a German wind-power deal – fell short of the €21.4-billion poll average.</s>FRANKFURT, Germany (AP) — Germany’s Siemens AG says revenue from a large power generation project in Egypt helped its fourth-quarter net profit rise by 18 percent.

The Munich-based company, which makes trains and medical scanners as well as power plants, said Thursday that its profit for the quarter ending Sept. 30 rose to 1.18 billion euros ($1.28 billion) from 1.00 billion euros in the period a year earlier.

The quarterly profit was slightly below market expectations for 1.24 billion euros.

Siemens said its power and gas division was seeing more revenue as it fulfills a large order for electricity generating facilities in Egypt.
Siemens AG announces that it plans to spin off its US$15 billion health care division, making it its own independent company.