* CEO says to consider growth regions, technologies
* Must continue to cut costs
* Q1 core operating profit up 15 pct, margin improved
* Shares fall 1.2 percent, underperform market
By Maria Sheahan and Jens Hack
MUNICH, Jan 28 (Reuters) - Siemens shareholders told Chief Executive Joe Kaeser they expected him to deliver radical change at the German engineering group that will permanently close the gap with more profitable rivals.
Kaeser, a conservative former finance chief, got the top job at Germany's second-biggest company by market value when his predecessor was pushed out in a messy boardroom battle last July. He has promised to present a new strategy in May, but investors are growing impatient.
"Since Kaeser is taking so much time to formulate his plan, we investors will expect him to unveil a major move," Henning Gebhardt, a fund manager at Deutsche Asset & Wealth Management, said on Tuesday at the company's annual shareholder meeting.
Siemens, whose products range from gas turbines to fast trains and industrial automation software, published quarterly financial results earlier on Tuesday that showed Kaeser is starting to turn the company around.
Siemens lost ground to competitors including Switzerland's ABB and U.S.-based General Electric (GE) under former CEO Peter Loescher as it focused on sales growth and poor project management resulted in a series of costly charges.
Kaeser is continuing his predecessor's plan to save 6 billion euros ($8.2 billion) over two years and has worked to improve the way the company handles big risky projects. That helped boost core operating profit by 15 percent and raised margins in the financial first quarter ended December.
Revenue fell 3 percent to 17.3 billion euros, below analysts' average forecast, as the strong euro hurt sales.
The results were well-received after rival ABB issued a profit warning last week and Dutch peer Philips said earlier on Tuesday that currency volatility in emerging markets and weak orders for healthcare equipment would mean a slow start to the year.
Analysts also welcomed a 9 percent rise in Siemens's quarterly new orders, which indicates a return to revenue growth, after the company signed a big contract to deliver subway trains to Saudi Arabia and won its biggest order for onshore wind power equipment ever from the United States.
The company affirmed its full-year outlook for flat revenue and an increase in earnings per share of at least 15 percent.
Its shares rose in early trade but by 1242 GMT were down 1.1 percent, one of the biggest fallers on Germany's blue-chip DAX index. Some analysts pointed to one-off gains from real-estate sales that flattered quarterly profit as a reason for the fall.
FAITH IN CEO
Kaeser told shareholders at the annual meeting that he would examine which regions and technologies offer future growth.
He said he would try not to repeat his predecessor's mistakes of "frantically taking action or making cosmetic changes" but would instead seek a long-term strategy focusing on the group's strengths in electrical engineering, and continued cost control.
Despite the long wait for a new strategy, investors seem to be confident that Kaeser will do a better job than Loescher, who was forced to drop a strategy to increase annual sales by about a third to 100 billion euros.
"You have the historical opportunity to rebuild Siemens from the ground up and to make the lumbering tanker manoeuvrable, profitable and fit for the future again," Union Investment fund manager Ingo Speich said.
Daniela Bergdolt of German shareholder rights group DSW said Kaeser should be allowed to take time to formulate his strategy, "but then, he needs to present something decent".
Since Kaeser took over, Siemens' stock has outperformed the market with a 17 percent gain. Its price rose above 100 euros for the first time in just over six years last month, recovering to levels last seen before the global financial crisis.