Siemens Cut Losses In July-September Quarter

Industrial conglomerate cut losses by 63 percent in its fiscal fourth quarter, despite hefty one-time charges, as a recovering global economy fueled a rise in new orders.

BERLIN (AP) -- Industrial conglomerate Siemens AG cut its losses by 63 percent in the July-September quarter, despite hefty one-time charges, as a recovering global economy fueled a healthy rise in new orders.

Siemens said Thursday it lost euro396 million ($545 million) in its fiscal fourth quarter, compared with a shortfall of euro1.06 billion a year earlier, and announced it would raise its dividend payout.

Revenue was up 8 percent to euro21.23 billion from euro19.71 billion, and new orders climbed by a quarter, to euro23.47 billion from euro18.75 billion.

The strongest order growth of 40 percent came from the energy division, as global energy markets improved and more large orders were received, Siemens said.

"We are coming out of the economic downturn with full momentum," CEO Peter Loescher said. "Our growth is gaining speed."

The company said it has now defined a "clear dividend policy" for the first time and plans in future to distribute between 30 and 50 percent of its net income to shareholders. It said it will propose a dividend of euro2.70 for the 2010 fiscal year, up from the previous year's euro1.60.

Siemens, based in Munich, makes everything from light bulbs to trams and turbines for power stations.

The company already had said in September that it would take a charge of up to euro1.4 billion to reflect revised growth prospects at its health care diagnostics business.

On Thursday, Siemens said it had taken a euro1.2 billion charge -- in addition to charges of euro383 million in charges to complete staff cuts at its information technology unit.

The operating profit for the quarter was down 45 percent at euro1.06 billion. For the full fiscal year, however, it was up 4 percent to euro7.79 billion.

Full-year net profit came in at euro4.07 billion -- up 63 percent from euro2.5 billion in 2008/2009. Revenue was down to euro75.98 billion, a 1 percent slip, but new orders rose 3 percent to euro81.16 billion.

Loescher said in a statement that Siemens expects to "take this positive momentum into the next fiscal year."

"We expect clear growth in new orders compared to fiscal 2010," he added. "Also, revenue should again grow moderately. We expect to continue the positive trend in earnings growth."

Siemens said it expects the new fiscal year's income from continuing operations to come in "at least 25 percent to 35 percent" higher than the 2010 year's figure.

The company said it had free cash flow from continuing operations of euro2.99 billion for the quarter and euro7.11 billion for the full fiscal year -- compared with euro3.79 billion in the previous year.

It said it is implementing a new growth targets system, dubbed "One Siemens," that will put the company on course to focus on "innovation-driven markets like environmental technology, the high-growth emerging countries and the service business."

The quarterly figures for new orders and operating profit beat analysts' expectations, as did the dividend hike.

UniCredit analysts said in a research note that the 2011 guidance "is sufficiently vague to allow for future upside." Still, Siemens shares were down 2.1 percent at euro83.16 in Frankfurt trading.

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