Orders, sales and net profits are all down at Siemens - with China too a drag on its Q2 numbers. And another European engineering powerhouse, Rolls-Royce, reports a 32% decline in first-half profits. But like Siemens, those results are still better than expected. David Pollard reports.
Six of eight divisions at German industrial powerhouse Siemens delivered solid results for the third quarter. The other two, though - gas turbines and transportation - didn't. And its healthcare and industrial software units took an extra knock from China - where sales fell eight per cent. Globally, orders were down 5 percent, sales down 3 percent and net profit down 2 percent. That was better than expected. But Siemens continues to target a full-year profit margin of 10 to 11 percent from its industrial businesses - some way lower than rivals like General Electric. With Siemens facing the same global pressures as many others. Kathleen Brooks, Research Director for City Index. (SOUNDBITE) (English) KATHLEEN BROOKS, RESEARCH DIRECTOR, CITY INDEX, SAYING: ''A lot of the big exporters in Germany are very leveraged and are very reliant on the strong Chinese, Russian and Brazilian consumer and they're all areas that we know are struggling at the moment.'' Like Siemens, Rolls-Royce is keeping its full-year guidance unchanged. That despite a 32 per cent drop in first-half profits - though that too was better than expected. Rolls-Royce shocked investors earlier this month with a profits warning at its aero-engine division - the third time the firm slashed forecasts this year. This time, though, no profits warning - and there was even a small bonus for shareholders with a 3% rise in dividends.