Spillover

By Reuters -  |  Posted 2008-04-30 Email Print this article Print
 
 
 
 
 
 
 

Divestment of corporate telecoms unit Siemens Enterprise Networks is expected to result in a loss.

SPILLOVER

Loescher said he was "guardedly optimistic" about the second half but warned that a global crisis in the financial sector could spill over into other sectors.

"We already see first signs of cautiousness on the part of customers in our standard products business here in Germany," he said.

Loescher, an outsider who took charge mid-2007 to slim down and reshape the group, wants to restructure it and match the profitability of rivals such as General Electric (GE.N: Quote, Profile, Research).

Siemens said it expected revenue, excluding acquisitions, to grow twice as fast as global economic growth this fiscal year.

But full-year group profit from operations and income from continuing operations will remain flat, it said.

Loescher said the outlook did not include the potential impact from a corruption probe and restructuring measures.

Siemens is being investigated by authorities in numerous countries for payments supposedly made to consultants between 1999 and 2006 that are suspected of being bribes. Siemens itself is investigating transactions worth 1.3 billion euros.

The U.S. Securities and Exchange Commission (SEC) and Department of Justice (DoJ) as well as prosecutors in Munich are also carrying out investigations.

Siemens has said that the SEC and the DoJ are willing to negotiate a settlement in respect of possible violations of U.S. law by Siemens.

Chief Financial Officer Joe Kaeser reiterated that he expected those talks to take many months.

Loescher, who has regrouped the company's ten divisions into three and scaled down management, reiterated that the company would continue to streamline its portfolio.

Divestment of corporate telecoms unit Siemens Enterprise Networks, which it has been trying to sell for almost two years, is expected to result in a loss.

(Editing by David Cowell)



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