Siemens Posts Strong Q2 Results

LONDON (04/27/2000) - Siemens AG today said sales and earnings for its second fiscal quarter, ending March 31, both showed strong growth compared to the same period last year.

Net income before one time items doubled over last year at 780 million euros (US$721 million), Siemens said in a statement. Net income grew 104 percent from 1999 second quarter net income of 383 million euros.

That figure does not include a one-time gain of 3.63 billion euros due to the sale of some of its holdings, including the sale of 29 percent of Infineon Technologies AG, the stake it held in Switzerland's Cablecom Group as well as the sale of Siemens' own communication cables business, the company said.

The German electronics and engineering company also said it plans to spin off its U.S.-based telecom switches unit Unisphere Solutions Inc. later this year as well as pursue a stock buy-back plan worth 1 billion euros.

Revenue in the second quarter rose 15 percent from the same period last year to 19.1 billion euros from 16.6 billion euros. Sales broke out to 14.5 billion in sales internationally and 4.6 billion in sales generated from its German operations, Siemens said.

Growth was spurred by its Information and Communications division, the company's biggest profit generator, Siemens said. The division is made up of a business group, a networking group and a products group.

"Revenue growth comes from all parts of the company which hasn't been the case in several years," Siemens spokesman Dirk Rheker said in a telephone interview.

Siemens merged last year with Fujitsu Ltd. for the production of computer hardware. The joint venture was approved by the European Commission last October. [See "EU Clears Siemens, Fujitsu Joint Venture," Oct. 1, 1999.]Rheker denied that the joint venture was the source of Siemens' strong performance, crediting rather the company's 1998 restructuring program.

"Fujitsu is just consolidated equity at this point, though it is an important part of our portfolio. Our Ten Point Program is mainly what contributed to the very, very successful numbers we were able to release today," Rheker said, referring to the ongoing restructuring plan within Siemens.

Siemens AG, in Munich and Berlin, can be reached at +49-89-234-0, or at http://www.siemens.de.

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