Siemens Says 1st-Qtr Profit Improved `Significantly'
(Update3)
By Hellmuth Tromm
Munich, Jan. 17 (Bloomberg) -- Siemens AG, Germany's biggest electronics and engineering company, said earnings in its fiscal first quarter rose ``significantly'' from the previous three months as units including its handset division returned to profit.
Profit before interest and tax was still lower than in the year-earlier quarter, even as orders and sales rose, Siemens said before its annual general meeting. The Munich-based company didn't give any figures. It plans to release earnings next week.
Siemens, whose businesses include power plants, trains and light bulbs in addition to mobile phones and networks, last year announced 20,000 job cuts to help stem losses. Chief Executive Heinrich von Pierer today again said he expects a recovery.
``It's a positive surprise, particularly concerning their cell phone division,'' said Luc Mouzon, an analyst at BNP Paribas in Paris who rates the German company's stock ``neutral.''
Siemens shares rose as much as 2.8 percent in Frankfurt. The company had a loss of 1.1 billion euros ($970 million) in the three months through Sept. 30, 2001. In both the third and fourth quarters, five of its 13 business units were in the red.
Higher Earnings
The forecast for a ``significant'' increase in full-year earnings this year remains ``unchanged,'' Siemens Chief Executive Officer Heinrich von Pierer told journalists in Munich.
The four units IC Mobile, Siemens Business Services, Siemens Dematic and Siemens VDO Automotive ``should be back in the black or getting quite close,'' Siemens said. The networks division, however, continued to post losses, the company said today.
``The overall environment in networks hasn't improved and I don't expect a change soon,'' von Pierer said before the annual shareholder meeting. Further job cuts at the unit, which already plans to eliminate 10,000 jobs, can't be excluded, he added.
``Overall the worst is behind us as far as job cuts are concerned,'' he said. Siemens announced a total 20,000 job cuts last year as losses in its telecommunications units mounted.
The mobile phone unit reached its targets of selling about 9 million handsets in the fiscal first quarter, von Pierer also said. He reiterated that Siemens is talking to competitors about teaming up in the production of third-generation mobile phones.
The sale of additional shares in Infineon Technologies AG made a ``substantially'' positive contribution to earnings in the first quarter. The sale of 40 million Infineon shares last week will be booked in the second quarter, Siemens said.
Siemens shares were recently treading at 70.70 euros, 1.45 euros higher than yesterday.
©2002 Bloomberg L.P. All rights reserved. Terms of Service, Privacy Policy and Trademarks. |
