Siemens hints at turnaround
Shares rise after German giant talks of growth
By Peter Bale, FTMarketWatch
Last Update: 4:09 AM ET Jan. 17, 2002
MUNICH, Germany (FTMW) - Mildly bullish comments from European technology leader Siemens sent its shares and European markets higher on Thursday on hopes of a turnaround.
With classic understatement but nonetheless unmistakeable enthusiasm, Siemens (DE:723610: news, chart, profile) (SI: news, chart, profile) said it had seen a turnaround in the first quarter of this year from the dark period of the fourth quarter of last year.
"Although earnings from operations are below those of the very strong first quarter of the prior year, they have improved substantially over last year's weak fourth quarter," Siemens said in a statement ahead of its annual shareholder meeting in Munich.
Strong businesses
Heinrich von Pierer, chief executive of the train-to-telephones conglomerate, said Siemens was seeing strong growth in its medical, power generation and railway equipment businesses.
He reaffirmed targets for 8-11 per cent margin growth in the loss-making mobile phones and telecommunications divisions by 2004, a target already shifted from 2003.
Von Pierer said recovery could emerge in the global telecoms business in the second half of this year and early next.
"We have strong businesses. These businesses will do well this year and will do better than last year," he said in an interview with CNBC television. "The turnaround in the telecom sector may come [in the] second half of this year and beginning of next year. It is difficult to predict."
Shares up
Shares in Siemens rose as much as 2.5 per cent to €70.90 in early trade and helped bring a positive turn to broader European markets for which the company is a clear bellwether of business sentiment. See the pan-European markets report
Siemens said that new orders had also risen in the first quarter, as had sales though at a slower rate.
Despite the more positive tone, Siemens was still cautious on the outlook saying the slowdown in the economy since spring 2001 and the impact of the September 11 terror attacks make it difficult to forecast future business developments.
Peter Bale is Editor-in-Chief of FTMarketWatch.com in London. |
