Siemens gets back into the black

German electronics and engineering behemoth Siemens AG posted its first profit in three quarters, but said it might need to take additional restructuring measures at its network hardware division.

Net income for the first quarter of its fiscal year 2002 was €538 million (A$881 million as of Dec. 31, the last day of the period being reported), down from €1 billion in the year ago period, Siemens said in a statement Wednesday. Siemens posted a net loss of €1.1 billion in the fourth quarter of fiscal year 2001, according to the statement.

The net income includes a gain of €157 million related to sale of shares in Infineon Technologies AG. The chip-making subsidiary was deconsolidated from Siemens' results as of Dec. 5.

Siemens reported net sales for the quarter of €20.99 billion, up from €20.47 billion in 2001. The growth came from noncyclical businesses such as transportation systems and power transmission and distribution, the company said.

The Information and Communication Networks (ICN) division, which makes networking equipment, still causes concern after thousands of job cuts, Siemens said. ICN is reviewing the scope of its restructuring program, especially for its U.S. operations, and may take additional measures as it faces continued slow demand, Siemens said. External sales at ICN fell to €2.44 billion for the quarter, from €2.74 billion a year ago.

Better news came from the Information and Communication Mobile (ICM) division. ICM's external sales in the quarter rose to €3.09 billion, compared to €2.91 billion in the year-ago period. Although sales of mobile phones rose to 9 million units in the quarter, revenue from them fell, as demand was strongest for lower-priced models, Siemens said. Sales of mobile network infrastructure rose 19 percent.

Looking ahead, Siemens said its restructuring efforts are paying off and that the first quarter shows that the company's operating groups should be able to meet their respective operating margins that have been set for the year 2003.

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