Separated at birth? In many ways, Germany's Siemens
In the recently concluded fourth quarter, Siemens saw its losses increase to 2.4 billion euros ($3 billion) from a 74 million euro loss in the same quarter of 2007. Much of the deficit related to a loss of 1.16 billion euros ($1.46 billion) involving the sale of the company's 51% ownership stake in Siemens Enterprise Communications.
Beyond that, the company's quarterly results were hit by a 1 billion euro ($1.24 billion) loss from costs related to an ongoing investigation into allegations that Siemens paid bribes to secure contracts. The investigation and its aftermath already have cost Siemens plenty in fines.
During the quarter, Siemens' profits from its three largest sectors were consistent only in their slippage. Its Industry Sector improved its revenue by 5%; on the basis of softness in two of its own subunits, profits slipped by 22%. Similarly, the Energy Sector's revenue grew by 13%, but its sector profits slid by 21.5% in the quarter. And with credit tightening both in the U.S. and globally, profit from the Healthcare Sector dropped about 40% year over year.
Perhaps the most important aspect of the company's ability to hold up in the market, despite its across-the-board slides in profits and its bribery-charge settlement, was its backlog of approximately 85 billion euros, or $105.4 billion at the end of the quarter. Indeed, largely as a result, the company's share price improved by 8.7% between the close of business Wednesday and the end of Friday's session. At the same time, management noted that it expects its revenue to grow in fiscal 2009 at twice the rate of global gross domestic product, the company's typical measuring device.
I'm intrigued that Siemens can watch its earnings slide in the midst of a sloppy market, yet still experience concurrent share-price improvement. As with GE and fellow technology companies such as United Technologies
Siemens checks in wearing four out of five stars from Motley Fool CAPS players. Does that include your vote?
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