Siemens AG has announced that its net profit declined by 88% in the fourth quarter (July-September) as a direct result of losses from its information technology and mobile phone businesses. The firm posted earnings of 77 million euros (US $90.4 million), down from 654 million euros last year.
Siemens, currently Europe’s largest electronics and electrical engineering firm, said that its IT division, Siemens Business Services, suffered a fourth quarter loss of 427 million euros (US $501.2 million) versus a loss of only 28 million euros a year earlier. Meanwhile its mobile phone division posted a loss of 420 million euros (US $493 million) in the fourth quarter. Siemens will be selling its mobile phone enterprise to BenQ of Taiwan, which it paid 250 million euros (US $293.5 million) just to take over the division. Siemens already slashed 2,400 jobs at its IT division, and it says that it is planning more cuts as well as moving its concerns into its other business units.
As for Siemens’ overall performance for the fiscal year ending September 2005, it posted earnings of 2.2 billion euros (US $2.6 billion), compared with 3.4 billion euros in fiscal 2004. Full-year revenue was 75.4 billion euros (US $88.5 billion) versus 70.2 billion euros in 2004.