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Siemens posts 4Q loss
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November 14, 2001: 9:23 a.m. ET
Demand for telecom equipment drops sending German giant into red
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LONDON (CNN) - Siemens posted a fourth-quarter loss on Wednesday as demand for telecom products dropped sharply.
Germany's largest telecom and engineering giant and its rivals, France's Alcatel and Canada's Nortel Network, have seen profit slump as telecom operators delay orders in an attempt to cope with a sharp economic slowdown.
Siemens swung to a fourth-quarter net loss of  1.1 billion ($968 million) compared with a profit of 562 million in the same period a year earlier. The company, which has announced plans to shed 17,000 jobs, said the costs of job cuts and reorganizing its businesses was 532 million.
Estimates by analysts ranged from a net loss of 2 billion and a net profit of
297 million, according to a Reuters survey. Group sales in the quarter rose to 24.5 billion from 23.7 billion, ahead of most analysts' forecasts of a fall.
Siemens said it was confident of being able to turn around its troubled Information and Communications units and looked forward to improved earnings from operations.
"All three Groups in the Information and Communications business segment were adversely affected by rapidly deteriorating business conditions," said Siemens. "The company will continue to monitor its business performance, particularly the trend in sales and order intake to better assess the effects of September 11."
Siemens stock, which has fallen more than 40 percent this year from a peak of 106.39 on January 19, rose 8.2 percent to 62.49. The stock dropped to a low for the year of 34.75 on September 21.
The company posted a loss before interest, tax and amortization (EBITA) of 130 million, including a 959 million charge. The result, which followed a profit of 840 million, excluded results from Siemens' loss-making chip unit Infineon Technologies.
"My first reaction is that the headline looks bad but the underlying numbers look better than we expected," said Mark Davies-Jones, an analyst at Schroder Salomon Smith Barney in London.
The three units at Siemens' Information and Communications business posted a total loss before interest, tax and amortization (EBITA) of 823 million, which was more than the 683 million loss forecast on average by eight analysts polled by Reuters.
Siemens' key telecom networks unit ICN produced a loss of 498 million euros including writedowns and charges, while the mobile unit ICM showed a loss of 21 million.
Profits at Siemens' power generation, railway equipment and medical services businesses came within the range of forecasts, with the power division, which has benefited from strong U.S. demand for gas turbine power
stations, posting an operating profit of 202 million, against 197 million a year earlier.
Osram lighting also produced strong profits while automation and drives beat forecasts with a profit of 270 million. Siemens VDO, the automobile electronics firm, posted an operating loss of 158 million, much worse than expected.
Reuters contributed to this report. 
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