|
Siemens warns of chip pain
|
 |
March 13, 2001: 11:35 a.m. ET
German technology titan says earnings will suffer from worsening chip demand
|
LONDON (CNN) - Siemens warned on Tuesday that a downturn in the semiconductor market would force the firm to reduce its earnings targets for this year.
Germany's largest technology firm, which listed its shares in New York on Monday, said its Infineon Technology (FIFX) chip-making unit would weigh down earnings.
Siemens said it can only stick to its December prediction of double-digit growth in profit and sales this year if its semiconductor unit is excluded.
Analysts said investors should not have been surprised by the profits warning from Siemens as the problems with Infineon had been known about for some time. 
Infineon had warned last November that it expects weaker demand and lower prices for chips used by the personal computer industry when it unveiled a 16-fold jump in quarterly profit.
Angela Dean, at Morgan Stanley Dean Witter, said: "It is a nervous market. Siemens have not said anything new today."
The Siemens statement follows a spate of profit warnings from technology companies on both sides of the Atlantic, including the world's largest chip supplier Intel (INTC: Research, Estimates), as slowing economic growth cuts into sales of computer-related products.
In a statement the firm said it was experiencing very different demand across its portfolio of activities, with mobile phones performing badly. A lot of the chips produced by its separately listed Infineon unit are used in cell phones.
"The outlook for the semiconductor industry has changed considerably in recent months," the company admitted on Tuesday.
Siemens (FSIE) shares sank 5 percent to  113.80 in Frankfurt after the announcement, while Infineon shares fell 1.6 percent to 36.25.
Cellular firm Motorola (MOT: Research, Estimates) said on Tuesday it would cut an additional 7,000 jobs, taking the number of cuts to more than 16,000 since December. The woes of the cellular sector were also reflected in a profit warning on Monday from Erucsson, the world's largest telecom equipment maker.
Siemens stressed on Tuesday that orders at other units, such as its heavy engineering power generation business, were experiencing a "boom". The company's financial year closes at the end of September 2001.
On Monday the company achieved a long-held aim of listing its shares on the NYSE, but admitted current attitudes towards technology shares meant it was holding back the listing of Unisphere, its network router business. 
|
|
|
|
|
 |
|
