BERLIN (AP) — German industrial conglomerate Siemens said Thursday its profit dropped in the fourth quarter, but its shares rose after it announced it would buy back 4 billion euros ($5.4 billion) in stock and predicted improved profits.
Siemens AG shares were up 3.6 percent to 96.11 euros ($129.44) in midday Frankfurt trading to be one of the top performers on the DAX index. The company, which makes a wide variety of products including high-speed trains and wind turbines, said it would spread out its buyback program over the next 24 months.
Net profit in the July to September period, its fiscal fourth quarter, fell to 1.07 billion euros ($1.45 billion) from 1.19 billion euros in the same quarter last year. Revenues declined to 21.17 billion euros from 21.44 billion in the quarter.
Profit was hurt by 688 million euros in charges for its "Siemens 2014" cost-cutting program, which cost 1.28 billion euros for the year, Siemens said. Still, the company said the cost-cutting program and productivity push will begin to pay dividends. Launched in 2012, the program aims to save 6 billion euros by 2014.
Siemens said it aimed to more-than-double its earnings per share growth from 7.2 percent in 2013. "With a solid fourth quarter, we completed an eventful year in fiscal 2013," CEO Joe Kaeser said. "Now we're looking ahead and concentrating on measures aimed at improving our profitability, which we are implementing rigorously and prudently."
In the fourth quarter, Siemens' energy division was the only one to post a profit increase, to 564 million euros from 163 million euros a year earlier. Otherwise, Siemens reported drops in profit at its healthcare, industry and infrastructure and cities sectors.
Profit for the full fiscal year rose to 4.41 billion euros from 4.28 billion the year before.