Siemens Profits Plunge

The Information and Communications (COM) Division at Siemens suffered an 81% collapse in profits in their fourth quarter figures announced yesterday. Recording a mere 53 Million Euro profit against 286 Million in the same quarter last year margins fell to a low of 1.4%. The year on year profit figure for the division fell by 36%.

Communications closed the sale of its mobile devices business to BenQ Group of Taiwan in the fourth quarter. In terms of sales fiscal 2005 orders in communications rose 6%, to €13.802 billion, and sales increased 3%, to €13.141 billion. The Mobile Networks division accounted for much of Communications growth for the year, and also made a strong earnings contribution. Group profit was €454 million for the year, down from €707 million a year earlier due predominantly to margin pressure in the enterprise business and severance charges, largely in the Fixed Networks division. The charges were offset by a gain of €208 million on the sale of a portion of Communications shares in Juniper Networks.

“Fiscal 2005 was a very dynamic year for Siemens,” said Siemens CEO Klaus Kleinfeld in presenting preliminary results for the year. “We saw healthy growth, notably double-digit growth in orders, and many of our Groups produced strong profit performances. We also completed one of our busiest years of portfolio changes, gaining new strength in power, medical solutions and industrial automation. Furthermore, we took important steps with respect to our Information and Communications businesses. Overall, we delivered €3.1 billion in income from continuing operations, in line with our earlier guidance, despite significant charges.”

Here in the UK Siemens has appointed Paul Morgan as their new Channel Sales Director. The company says the appointment is part of Siemens’ focus to strengthen and grow the indirect channel in the UK.

Morgan will be responsible for driving Siemens’ range of converged voice and data solutions as well as implementing partner programmes with the VAR community. Additionally, he will work with new technology and service partners to enhance Siemens Communications’ portfolio.

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