IT services and telecoms causing problems in Munich
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 Q4 profit for 2005 came in at €77m, a significant difference from the €654m 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 CEO Klaus Kleinfeld described fiscal 2005 as "a very dynamic year" for the company.