By Maria Sheahan and Jens Hack
BERLIN (Reuters) - Siemens' (GER:SIE) new Chief Executive Joe Kaeser promised on Thursday to buy back up to 4 billion euros ($5.4 billion) worth of shares while asking investors for patience as he works out a strategy by May to close a gap with more profitable rivals.
Shares in the engineering group, Germany's second-biggest company by market value, rose to their highest level in two and a half years in response to the buyback, and were up 3.9 percent at 96.16 euros at 1155 GMT.
Some investors had said they hoped Kaeser would provide at least a glimpse of how he planned to turn around the company as he presented quarterly financial results.
But, sitting front and centre at his first earnings conference as CEO and appearing relaxed and confident, the Siemens veteran kept his cards close to his chest.
"I don't want to present half-finished things," Kaeser told journalists at Siemens' former headquarters in Berlin, 99 days after taking the helm.
Kaeser reached the pinnacle of a more than three-decade career at Siemens - whose products range from gas turbines to fast trains and ultrasound machines - when his predecessor Peter Loescher was pushed out in a messy boardroom tussle in late July.
Under the former CEO, Siemens lost some ground to competitors such as Switzerland's ABB (VTX:ABBN) and U.S.-based General Electric (NYS:GE) in terms of profitability due to a focus on sales growth as well as poor project management that resulted in a series of one-off charges.
At the same time, companies are facing a dearth of large orders as industrial customers delay spending in a weak global economy.
Loescher launched a 6 billion euro savings programme a year ago including 15,000 job cuts to cut costs and focus on its most profitable businesses, but in the short run the programme fell short of its goal.
Since Kaeser took over, Siemens' stock has outperformed the market with a 13 percent gain, reflecting investors' hopes that he will do a better job at turning the firm around, though Kaeser himself warned not to overestimate the potential for a strategic revamp.
"We just want to explain what the company will look like after 2014," he said, without providing details.
Due largely to 1.3 billion euros ($1.8 billion) in charges related to the savings programme, plus project charges, annual operating profit from its four main businesses - Industry, Energy, Healthcare and Infrastructure & Cities - dropped 20 percent to 5.79 billion euros in its financial year that ended in September.
Kaeser promised that cost cuts would start having an effect on profits in the current fiscal year to September 2014, saying earnings per share would rise at least 15 percent from last year's 5.08 euros, more than double the 7.2 percent growth rate of fiscal 2013.
Core operating profit margin will widen by 2 to 3 percentage points after shrinking to 7.5 percent from 9.3 percent the previous year, Kaeser said.
Organic sales will meanwhile remain flat at last year's level of 75.9 billion euros as markets remain challenging, especially in industrial automation, a major part of the company's Industry business.
Analysts expect much more than Kaeser's conservative forecast, however, estimating on average a 4 percent rise in revenue and a 31 percent increase in earnings, according to a Reuters poll.
"However, we are not surprised to see Siemens start the year with conservative guidance," Commerzbank analyst Ingo-Martin Schachel said, saying after the profit warnings of recent years it would be positive if Siemens could start out low and raise its guidance mid-year.
($1 = 0.7392 euros)
(Editing by Noah Barkin, Sophie Walker and David Stamp)