Siemens, Europe's largest engineering company, reported its first quarterly loss in a year as writedowns at the telephone network venture with Nokia eclipsed profitable energy and health-care units.
The net loss in the fiscal fourth quarter narrowed to €1.13 billion from a loss of €2.47 billion a year earlier, Siemens said today in a statement. Sales fell 8.9 per cent to €19.71 billion. Siemens follows Nokia in writing down the value of the unit, which has lost ground to rivals including Ericsson.
The partners are eliminating as many 5,760 jobs, in the second round of cuts since the venture was formed in 2007. Siemens today said profit and sales next year will fall, and that it will fail to expand revenue at twice the pace of the global economy.
"The overall market environment will remain challenging in 2010," chief executive Officer Peter Loescher said in a statement. "To ensure the sustainable viability of businesses that have been particularly affected by the crisis we are continuing to rigorously implement all necessary measures."
Siemens's quarterly sales have not fallen for two consecutive periods since the middle of 2007. The German maker of trains, medical scanners and power generators declined 0.7 per cent, or 47 cents, to €67.1 earlier today. Impairment Charges Siemens took an impairment charge of €1.63 billion on the value of its stake in Nokia Siemens Networks in the fourth quarter.
The company loss a year earlier stemmed from Siemens booking a €1 billion provision to settle a bribery case, and charges of €1.54 billion to cut costs.
So-called sector profit for the industrial, energy and health-care divisions rose to €1.92 billion in the fourth quarter, beating analysts' estimates of €1.57 billion.
Next year, sector profit will fall to a range of €6 billion to €6.5 billion, from €7.47 billion reported for fiscal 2009. In 2009, Siemens had aimed to at least reach the previous year's level of €6.61 billion. Sales in 2010 will fall by a mid-single percentage digit, Siemens said.
Bloomberg