Siemens AG  (SIEGY) shares fell to the bottom of the market in Germany Thursday after the engineering group posted quarterly earnings that were largely in-line with expectations, but unveiled a new business strategy that will reduce its number of business units.

Siemens said industrial profits for the three months ending in June, the company's fiscal third quarter, rose 2% from the same period last year to €2.21 billion ($2.6 billion), while sale fell 4% to come in at €20.47 billion, narrowly missing analysts' forecasts.  The market reaction, however, was more focused on last night's strategy update, which plans to combine the group's five industrial divisions into three operating companies -- Gas and Power, Digital Industries and Smart Infrastructure -- a move the group said would increase growth rates and profit margins by 2% over the next five years

"It would be irresponsible to rest on our laurels now," said CEO Joe Kaeser in a statement released alongside the strategy update. "The speed and power of global changes are increasing, and it's our obligation to anticipate them. We're convinced that this is the right time to sustainably shape our future."

Siemens shares were marked 3.86% lower in early Frankfurt trading, the most in five months, and changing hands at 115.26 each, a move that essentially wipes out all of the stock's year-to-date gains.

Thursday's earnings also showed a 56% fall in profits for the groups Gas and Power division, one of the three units expected to drive growth under the 2020+ plan, thanks in part to ongoing moves by companies around Europe to switch from fossil to renewable fuels.

"Global energy trends continue to structurally reduce overall demand in markets for the Division's offerings, resulting in declining new-unit large turbine business and corresponding price pressure due to structural overcapacities and aggressive competitive behavior," Siemens said.

Siemens made its first move as part of the new business strategy with the €600 million purchase of Boston, Mass.-based Mendix, an industrial software group that will support the Germany group's drive into the Internet of Things. 

The group's overall order book rose 16% -- without adjusting for currency -- to €22.8 billion, Siemens said, a move "driven by a higher volume from large orders."