Germany's Siemens AG warned on Thursday that its energy business faces challenges in the coming quarters as it reported fiscal third-quarter core profit that fell short of expectations.

The news is a setback for Chief Executive Joe Kaeser, a conservative former finance chief who got the top job when his predecessor was pushed out a year ago, as he seeks to improve profitability after Siemens lost ground to competitors like Switzerland's ABB and U.S.-based General Electric.

Kaeser unveiled a corporate overhaul in May, dubbed "Vision 2020", that will see Siemens take out a layer of management by cutting back to nine core divisions from 16, spinning off its hearing aids business as a publicly listed company and separating out management of its healthcare business.

In the three months through June, operating profit from Siemens's four main businesses - industry, energy, healthcare and infrastructure & cities - rose 37 percent to 1.74 billion euros ($2.33 billion), missing the analyst consensus of 1.83 billion euros in a Reuters poll. [ID:nL6N0Q33ZQ]

Profit at the energy business slipped by 6 percent as it booked one-time charges, especially related to the delayed connection of offshore wind farms to mainland power grids.

Siemens said it still saw flat revenues in its fiscal year through the end of September, with an increase in earnings per share by at least 15 percent from last year's 5.08 euros. Analysts see 2013/14 revenue down 1.1 percent and earnings per share up by 25 percent.