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To: 49thMIMOMander who wrote (19791)	4/26/2002 5:02:56 AM
From: elmatador	Read Replies (1) \| Respond to of 34857

"contrasting with downbeat trading statements by competitors ranging from General Electric to Ericsson and Nokia" Siemens challenges sector gloom By Bertrand Benoit in Frankfurt Published: April 25 2002 08:33 \| Last Updated: April 26 2002 02:09 Siemens, the German electronics group, on Thursday defied rising gloom among some of its biggest competitors when it released markedly better-than-expected second-quarter results, with robust performances by its power generation and medical equipment businesses. The group, however, whose products range from light bulbs to x-ray equipment, said a steeper-than-anticipated downturn in the telecommunications equipment market would mean more job cuts and further restructuring in its struggling telecoms network subsidiary. These difficulties were nonetheless overshadowed by the good performances at Siemens's power turbine, medical equipment, and mobile phone businesses, contrasting with recent downbeat trading statements by competitors ranging from General Electric to Ericsson and Nokia. "These were very good results given the recent scare stories," said Swantje Conrad, analyst at JP Morgan, who had forecast quarterly earnings before interest and tax (ebit) of E576m, against the E919m ($825m) reported by the group on Thursday, barely changed from a year ago. Net income for the quarter reached E1.28bn, against E578m a year ago - but this included a E604m gain on the sale of Infineon shares - on sales up 3 per cent to E21.07bn. Shares in Siemens rose E2.22, or 3.5 per cent, to E65.82 on Thursday in a falling German market. Power Generation was the group's best performing unit, with ebit of E450m in the quarter, 3.5 times the level of a year ago and half the group's total profits. Including E75m in exceptional gains, the unit had an operating margin of 17 per cent, well above its 2003 target of 13 per cent. An increase in new orders was particularly welcomed by analysts, who have feared a downturn following the end of the gas turbine boom in the US, as recently confirmed by rival General Electric. Heinrich von Pierer, Siemens chief executive, said these figures and the robustness of the medical equipment and mobile phone units, would not prevent another tough year in 2002. "The 'guarded optimism' I spoke of last December was justified. And my comments that we still had to master major challenges also was accurate. This is particularly true of ICNetwork," he said. ICNetwork, the group's second-largest unit, will shed 6,500 jobs by the end of 2003 and generate a further E1.5bn in cost savings - on top of the 10,000 job cuts and E2bn of savings already announced. "Many companies [telecoms carriers] are no longer struggling with margins and for customers, but fighting to survive," Mr von Pierer said. "The situation is particularly dramatic in the US and I do not see a marked improvement in the next 12 to 18 months." ICNetwork had ebit loss of E158m in the second quarter, against a E50m profit a year ago, on sales down 16 per cent from the previous year.