Siemens' profits nosedive

Restructuring costs and poor performance of IT services and telecoms units mean a massive drop from last year's figures

Siemens has seen fourth-quarter results take a dramatic tumble, due in part to the poor performance of its IT services and telecoms units.

Siemens' profit for the fourth quarter of 2005 came in at €77m (£52m), a significant difference from the €654m (£440m) seen in the corresponding period the year before, while revenue remained largely stable year-on-year.

Restructuring costs have played a major part in the company's results woes this quarter. According to Siemens, the recent divesting of the company's mobile division caused a hit of €810m on the balance sheet.

The Communications division, which previously housed Siemens' mobile unit, saw its profit tumble, even without the inclusion of mobile division's loss. The unit as a whole brought in €53m in the fourth quarter of this year, compared to €286m in the corresponding period last year.

The situation at Siemens' IT services affiliate SBS (Siemens Business Services) has also worsened. SBS' debt grew from €28m in the last quarter of 2004 to €427 this year.

Siemens recently announced a cost-cutting drive to trim outgoings by €1.5bn. As a result, the firm is shedding 2,400 jobs over the next two years.

In a statement, Siemens chief executive Klaus Kleinfeld described fiscal 2005 as "a very dynamic year" for the company.