Outlook remains bleak for Siemens and Lucent

24 Apr 2003

Equipment vendors Siemens [NYSE: SI ] and Lucent Technologies (NYSE: LU) have released financial results for the first three months of 2003 which show that the beleaguered telecoms infrastructure market is still some way from embarking on the road to recovery. Siemens’ total sales for the period stood at EUR18.23 billion, whilst the total value of orders reached EUR19.08 billion, down 14% and 15% respectively from the second quarter a year earlier. The company said that excluding currency translation effects and the net effect of acquisitions and dispositions, sales and orders actually decreased 5% and 7% respectively. Net income was EUR568 million, compared to EUR1.28 billion in the corresponding period of 2002, although that figure included a gain of EUR604 million from sales of shares in Infineon Technologies. The company said that lower earnings at its Power Generation subsidiary were offset by earnings growth at Siemens VDO Automotive, Automation and Drives, Power Transmission and Distribution, and Osram.

Meanwhile Lucent Technologies reported revenues of USD2.4 billion for the quarter, which represents a 16% increase from the USD2.08 billion recorded in the previous quarter but is well down on the USD3.52 billion registered in the corresponding period of 2002. Revenues in the US increased 12% from the previous quarter to USD1.45 billion, and international revenues increased 22% to USD952 million. However, compared with the year-ago quarter, these figures represent declines of 40% and 12% respectively. Net losses for the quarter were USD351 million, up from USD264 million in the previous three months, but an improvement on the USD495 million loss registered in the first three months of 2002. At the end of March 2003 Lucent had USD3.4 billion in cash and short-term investments, a reduction of approximately USD300 million from the previous quarter. The company expects to return to profitability in late 2003.