By Maria Sheahan
MUNICH (Reuters) - Siemens
"There is no alternative in the short term to a strong focus on cost management and increased productivity," said Joe Kaeser, a former finance chief who got the top job when his predecessor was pushed out last July.
Under his predecessor Peter Loescher, Siemens lost ground to competitors such as Switzerland's ABB
Loescher was forced to put on the back-burner a strategy to increase annual sales by about a third to 100 billion euros ($137 billion), announcing instead a plan to save 6 billion euros over two years, which is continuing under Kaeser.
The programme has started to bear fruit, with Siemens posting a 15 percent gain in fiscal first-quarter core operating profit and an improved profit margin to 10.2 percent from 8.6 percent the year before thanks to lower project charges.
"We expect that the high one-off charges are in the past," DZ Bank analyst Jasko Terzic said, adding he expects Siemens to benefit from any coming economic recovery in Europe.
CEO TO FACE INVESTORS
Siemens' quarterly Total Sectors profit - operating profit from its four main businesses - came to 1.79 billion euros, falling slightly short of analysts' average forecast of 1.86 billion in a Reuters poll, but was still seen as positive following disappointing reports from rivals.
GE earlier this month posted slightly lower than expected 2013 profit margins, hurt by delayed wind turbine deliveries and poor energy management results, and ABB issued a profit warning last week.
Siemens in contrast affirmed its outlook for earnings per share to rise by at least 15 percent in the current fiscal year through September 2014 from last year's 5.08 euros.
Later on Tuesday, Kaeser will face investors at the company's annual general meeting who may be hoping for a glimpse of his new strategy for the group, which he has promised to unveil in May.
Since Kaeser took over, Siemens' stock has outperformed the market with a 17 percent gain, reflecting investors' hopes that he will do a better job at turning the firm around.
Also, the price of shares in Siemens rose above 100 euros apiece for the first time in just over six years last month, recovering to levels last seen before the collapse of investment bank Lehman Brothers kicked off the global financial crisis that sent asset prices plummeting.
(Editing by Victoria Bryan and Mark Potter)