Siemens earnings improve

January 17, 2002 Posted: 0931 GMT

LONDON (CNN) -- Siemens said on Thursday the telecoms market had not improved and it could not rule out more cost cutting measures.

Germany's largest telecom and engineering company said fiscal first quarter earnings had fallen compared to the same period last year, but had improved "substantially" over the previous quarter.

The Munich-based company, which posted a net loss of 1.1 billion ($968 million) in the fourth quarter and shed 17,000 jobs last year, and its rivals, France's Alcatel and Canada's Nortel Network, have seen profits slump as telecom operators delay orders in an attempt to cope with a sharp economic slowdown.

Chief Executive Heinrich von Pierer, in a speech to a shareholders' meeting, said he expected operating earnings at Siemens to improve in 2002.

Its mobile phone, IT consultancy and VDO automotive and electronics unit "should be back in the black or getting quite close," while it still expected a loss at its telecom networks unit, the company said.

In a preliminary statement ahead of results on January 23, Siemens said that first quarter 2001/2002 orders rose at a rate comparable with the same period last year, while sales also rose, but at a slower pace.

The sale of 40 million shares in Infineon Technologies, Europe's second-largest chipmaker, made a "substantially" positive contribution to earnings in the first quarter, the company said.

Siemens declined to provide an outlook, saying it was difficult to accurately forecast future business developments.

Siemens's stock rose 2.1 percent to 70.70 in early Frankfurt trading on Thursday. Its stock has fallen by a third from a high of 106.39 on January 19, 2001.