Siemens has reported a drop in sales and profit in the second quarter due in part to continuing losses in its telecommunication equipment manufacturing business.
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Net income fell to €568m (£357m), down from €1.3bn a year earlier, when the German engineering and electronics company booked a gain of €604m from selling shares in the chip manufacturer Infineon Technologies.
Sales in the second quarter fell 14% to €18.2bn (£11.4bn). Excluding currency translation effects and the net effect of acquisitions and dispositions, sales decreased 5%. First-half sales were €37.1bn, down 12% year-on-year.
Second-quarter orders dipped 15% to €19.1bn (£12bn). First-half orders were €39.2bn, down 18% year-on-year.
Despite the difficult economic situation in Europe and the US, Siemens said many of the units within the group are on track to achieve their 2003 earnings targets. But the company cautioned that the ongoing weakness in capital spending in major markets is a concern.
The Information and Communication Networks (ICN) group narrowed its second-quarter loss to €147m (£92m) from €158m a year ago, Siemens said. While sales of the group's Enterprise Networking division contributed €49m to group profit on sales of €887m, the Carrier Networks and Services division posted a quarterly loss of €180m on sales of €797m.
For the ICN group as a whole, second-quarter sales dropped 37% to €1.7bn (£1.1bn) from €2.7bn the year before, Siemens said.
Siemens power generation business, which has helped balance sliding sales of telecoms equipment over the past three years, saw a 35% dip in second-quarter sales to €1.7bn.