German conglomerate Siemens AG said Thursday net profit for its fiscal third quarter fell 7 percent as the global recession hurt the company's industrial equipment and health care sectors, prompting it to announce some 1,600 job cuts across Europe.

The Munich-based company said net profit in the April-June period fell to euro1.3 billion ($1.8 billion) from euro1.4 billion in the year-ago quarter.

Siemens, whose fiscal year begins in October, said revenues for the third quarter fell 4 percent to euro18.3 billion from euro19.2 billion.

The company, whose products range from light bulbs to high-speed trains, confirmed its full-year targets, even in the "current challenging global economic environment."

It said, however, that it would trim 1,600 jobs across Europe, cuts the company said were unavoidable.

Siemens said it would cut the bulk of the employees in Austria, affecting 900 workers. A further 300 jobs in Britain and 100 jobs in France will also be eliminated.

Another 300 workers, including 100 in Germany, will be let go at its building technologies division.

Siemens said it also continues to expect total sectors profit for fiscal 2009 to exceed the prior-year level of euro6.6 billion. Total sectors profit is a pretax measure.

The company also said it expects revenue to grow at twice the level of global gross domestic product. Siemens measures business on GDP because it's a good gauge as to how much the world will invest in capital goods and large infrastructure projects. If GDP growth is negative, the aim would be for the company's percentage decline in revenue to be less than half the rate of decline in global GDP.

"Our third-quarter results demonstrate that we are fully on track to achieve our targets for fiscal 2009," chief executive Peter Loescher said in a statement.

He said the company "did particularly well" compared with its main competitors.

"As expected, the macroeconomic environment clearly left its mark on new business. We had already prepared for that ahead of time. We are also carefully considering the challenges ahead. We will continue the rigorous pursuit of our corporate policy focused on sustainability," Loescher said.

The company said its energy business, which builds products including power generation and transmission equipment, achieved a 40 percent increase in operating profit year-over-year due to better economies of scale, more efficient project execution and a better project mix. The energy division reported operating profit of euro863 million compared with euro615 million a year ago.

The company's industry sector, which makes products for industry like motors and drives, and also includes the Osram lighting division and the mobility division which builds products including trains, meanwhile saw its operating profits affected the most by the downturn, falling to euro543 million from euro1.2 billion a year ago.

The health care sector, which makes products including diagnostic imaging and hearing instrument products, also reported lower operating profit of euro270 million, compared with euro326 million a year ago due to added costs related to specific contracts.

Siemens said orders of approximately euro17.2 billion in the third quarter were well below the prior-year level of nearly euro24 billion. The decline is attributable in part to the high order level posted in the prior year, which included a major deal worth roughly euro1.4 billion from the Belgian state railway system.

However, also Thursday, Siemens said it won an order with a Russian partner, train coach builder Tverskoy Vagonostroitelny Zavod AG, worth euro320 million to provide 200 sleeper railway cars to Russian Railways AG.

Starting in 2010, the coaches will be built in a Siemens plant in Vienna, Austria, and at the wagon factory of TVZ in Tver, northwest of Moscow.

Siemens has also said it stands to gain from a number of factors despite the global economic downturn.

For example, the company hopes to see about euro15 billion ($21 billion) in new orders because of global government stimulus programs, and said it has euro1 billion in infrastructure project orders in hand from South Africa, which is building furiously ahead of the 2010 World Cup of football there next summer.

Earlier this month, Siemens, along with 11 European companies also outlined a plan called Desertec, to build a massive solar power network across Saharan Africa. Though only still in the conceptual phase, the companies said the project could satisfy 15 percent of Europe's energy needs by 2050.

Siemens generated about a quarter of its euro77 billion ($108 billion) in fiscal 2008 revenues from its environmental portfolio, which includes renewable energy products, an area it will continue to focus on, even while it intends to also continue providing solutions in the nuclear, gas and coal sectors.

For the first nine months, Siemens said net profit fell nearly 60 percent to euro3.6 billion from euro8.3 billion in the year-earlier period. Nine-month revenues were however 2 percent higher, at euro57 billion.

Siemens shares closed up less than 1 percent at euro57.25 in Frankfurt.

___

On the Net:

http://www.siemens.com