Siemens AG returns to profit in Q4

AP News
Posted: Nov 10, 2011 3:41 AM
Siemens AG returns to profit in Q4

German industrial equipment maker Siemens AG swung back to profit in its fiscal fourth quarter as sales increased in Asia.

The company said Thursday it made a net profit of euro1.23 billion ($1.66 billion) in the three months to end-September in contrast to the loss of euro396 million loss in the same quarter a year ago, when the company had a large one-time charge at its health care division.

The company increased its dividend but gave an outlook for only moderate sales growth and indicated it didn't expect profits to rise next year.

Revenues rose 5 percent to euro20.35 billion, boosted by a 12 percent increase in Asia. The company said Thursday sales grew across all regions and experienced particularly strong growth in emerging markets.

Orders, however, fell 2 percent and the company forecast only "moderate" sales growth. It said its outlook for earnings in the coming year were "based on the high level we achieved in the prior year" and foresees earnings from continuing operations that are unchanged, excluding one-time gains from exiting its nuclear partnership with Areva.

Company CEO Peter Loescher said the company had performed well thanks to its balanced portfolio of businesses but warned that the economic environment ahead was uncertain.

"The macroeconomic environment continues to be volatile and difficult to assess," he said.

He said he expected growth in Europe's core markets but that turmoil from Europe's debt crisis could hurt the business environment in southern Europe _ which remains only 5 percent of Siemens' business.

The company raised its dividend to euro3.00 per share from euro2.70 per share last year.

Across Siemens divisions, its fossil-fuel power generation unit raised earnings by 10 percent to euro407 billion. Its power transmission equipment divisions, however, saw earnings slip 28 percent due to costs of hedging raw materials costs and the emergence of new competitors in low-cost countries.

Munich-based Siemens makes a wide range of heavy industrial goods, including trains and streetcars, power generating and transmission equipment, diagnostic machines for hospitals and factory automation and equipment.