Charges push Siemens to quarterly loss

[November 11, 2010]  BERLIN (AP) -- Hefty one-time charges pushed Siemens AG to a loss in the July-September quarter, but a recovering global economy fueled a healthy rise in new orders and earnings for the company's full fiscal year increased, the industrial conglomerate said Thursday.

Siemens said it lost euro396 million ($545 million) in its fiscal fourth quarter, still better than a shortfall of euro1.06 billion a year earlier.

At the same time, revenue was up 8 percent to euro21.23 billion from euro19.71 billion, and new orders climbed by a quarter, rising to euro23.47 billion from euro18.75 billion.

The strongest order growth of 40 percent came from the company's energy division, as global energy markets improved and more large orders were received, Siemens said.

"We are coming out of the economic downturn with full momentum," CEO Peter Loescher said. "Our growth is gaining speed."

Siemens, based in Munich, makes everything from light bulbs to trams and turbines for power stations.

The company already had said in September that it would take a charge of up to euro1.4 billion to reflect revised growth prospects at its health care diagnostics business.

On Thursday, Siemens said it had taken a euro1.2 billion charge -- in addition to charges of euro383 million in charges to complete staff cuts at its information technology unit.

The company's sectors, or operating, profit for the quarter was down 45 percent at euro1.06 billion from euro1.92 billion. For the full fiscal year, however, it was up 4 percent to euro7.79 billion from euro7.47 billion.

Full-year net profit came in at euro4.07 billion -- up 63 percent from euro2.5 billion in 2008/2009. Revenue was down to euro75.98 billion, a 1 percent slip, but new orders rose 3 percent to euro81.16 billion from euro78.99 billion.

Loescher said in a statement that Siemens expects to "take this positive momentum into the next fiscal year."

"We expect clear growth in new orders compared to fiscal 2010," he added. "Also, revenue should again grow moderately. We expect to continue the positive trend in earnings growth."

The company said it had free cash flow from continuing operations of euro2.99 billion for the quarter and euro7.11 billion for the full fiscal year -- compared with euro3.79 billion in the previous year.

It said it is implementing a new growth targets system, dubbed "One Siemens," that will put the company on course to focus on "innovation-driven markets like environmental technology, the high-growth emerging countries and the service business."

Siemens said it has now defined a "clear dividend policy" for the first time and plans in future to distribute between 30 and 50 percent of its net income to shareholders. It said it will propose a dividend of euro2.70 for the 2010 fiscal year, up from the previous year's euro1.60.

[Associated Press; By GEIR MOULSON]

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