Siemens expects to restrict fall in earnings

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The Independent Online
SIEMENS, the German electronics and engineering multinational, expects only a slight fall in earnings this year thanks to the sale of its cardiac-pacemaker business that has compensated for an overall weak performance.

While income from ordinary activities will be down nearly 15 per cent, net income for the year to September will not be far from the DM1.98bn ( pounds 825m) of 1992-93, said Heinrich von Pierer, chief executive, yesterday.

The positive impact of the economic recovery would only become apparent next year because the electrical engineering and electronics industry was at the tail-end of economic developments, he said in Prague.

Siemens' industry-oriented activities, which make up about a third of its business, remained mired in the recession. Deteriorating prices and stagnating sales continued to put pressure on net income, and Siemens expected financial income to be hit by turbulence in the capital markets.

Mr von Pierer highlighted strong orders growth from abroad, pointing to a more positive outlook for next year. In the first nine months foreign orders grew 18 per cent while domestic orders fell 5 per cent.

With a 34 per cent jump in orders in the first eight months, Siemens' semiconductor group is back in the black after more than 10 years. This leaves the Siemens- Nixdorf computer business as the main source of weakness. Mr von Pierer expects losses there to be reduced as it bears the brunt of continuing job losses.

These will see Siemens' workforce down to 385,000 by September from 404,000 a year ago.