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Munich (pte017/27.01.2005/10:30) - German conglomerate Siemens http://www.siemens.com has announced that its mobile phone business has continued to make losses, despite a rise in first quarter profits. As the Financial Times (FT) http://www.ft.com reports, the Munich-based company reported strong earnings in its autos, medical and power generation sections, but losses in the mobile phone business were only offset by the 208 million euro sale of a portion of shares held in Juniper Networks. The loss of 143 million euros in its mobile division is the company's third straight quarterly loss and is mainly due to its handsets not being able to lure customers away from bigger competitors such as Samsung and Nokia.
In November, the company had said that it was assessing the long-term future of its telephone handset business. Siemens has previously said that its options include selling the unit, turning it round or bringing in an outside partner. According to the company, "additional measures" would be taken to improve its mobile business and its Siemens Business Services section, which also reported losses.
The company's net income rose 38 per cent to 1 billion euros, compared with 726 million euros in the first quarter of last year. According to Heinrich von Pierer, Siemens' chief executive, the earnings growth was satisfactory. He also defended the 1 per cent fall in sales of 18.1 billion euros. "Revenue growth is typically slow in our first fiscal quarter. Depending on exchange rate developments, we expect higher turnover growth than in the past year," he said. According to von Pierer, the outlook for 2005 would see continued strong performances from the group's already successful sections and a return to profitability at its transportation section. "We are directing all our efforts toward increasing comparable net income for the full fiscal year," he added.
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