Siemens Net Income Drops, New Orders PleaseBy Reuters - | Posted 2008-04-30 Email Print
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MUNICH, April 30 (Reuters) - Siemens (SIEGn.DE: Quote, Profile, Research) reported strong growth in second-quarter orders and its shares rose despite net income dropping by a worse-than-expected two-thirds on the back of discontinued operations and charges at two units.
Shares in Europe's biggest engineering company were up 2.7 percent at 75.36 euros by 1534 GMT, making them the biggest second-biggest gainers and strongest positive weight in Germany's blue-chip index .GDAXI.
Amid a major overhaul and a struggle sign off on a worldwide corruption scandal, the turbines-to-trains maker warned in March that project reviews of three divisions would mean a hit on earnings of around 900 million euros.
The extraordinary charges, mainly at its power generation and transportion arms, came to nearly 860 million euros, Chief Executive Peter Loescher announced, adding that the reviews would be completed by the end of the company's fiscal third quarter on June 30.
He said new orders in the second quarter indicated "that we have good growth opportunities in the future" after new orders rose 15 percent to 23.4 billion euros.
Second quarter net income fell 67 percent to 412 million euros ($640.6 million), missing the 451 million average from a Reuters poll of 19 analysts.
Operating profit fell to 1.2 billion from 1.78 billion but beat analyst expectations of 1.016 billion.
Siemens' outlook had reassured and would prompt a positive, if muted share reaction, Citigroup analysts said.
They added that Wednesday's share rise was due to relief "that no new negatives have emerged and that current order trend remains strong."
Shares in the Munich-based company have lost a third of their value this year, hurt by project delays and the fallout of a widening corruption probe which has already cost several top managers their jobs.