MUNICH-Siemens AG recorded a net income of $1.3 billion in its first quarter, up 38 percent from the same period a year ago. The company posted loses in its Communications division-which houses its mobile-phone and networks operations-but strong earnings in other Siemens segments helped push up the company’s overall results.
Although Siemens executives had previously said they would make some sort of announcement about the company’s loss-making mobile-phone business, the company remained mum on the matter. According to the Wall Street Journal, Siemens’ departing chief Heinrich von Pierer said the company does not yet have a “concrete solution” for the mobile-phone business, but that it is “naturally quite clear to us that there is a need for quick action here-and for a strategic reorientation.” Industry has been riddled with rumors that Siemens would either sell its mobile-phone business or form a joint venture with another player.
Indeed, in the fourth quarter Siemens dropped behind Korean mobile-phone vendor LG Electronics Co. Ltd. for the first time. According to Strategy Analytics, Siemens sold 13.5 million phones in the critical holiday quarter compared with LG’s 13.9 million. The numbers give Siemens a 6.8-percent share of the global mobile phone market and LG a 7-percent share-making LG the world’s No. 4 mobile-phone supplier behind Samsung Electronics Co. Ltd.
In Siemens’ Communications division, the company posted $5.5 billion in sales in the first quarter, a decline from the same quarter a year earlier. In the mobile-phone business, Siemens posted a loss of $186 million in the quarter compared with a profit in the same quarter a year ago. The company sold fewer handsets in the quarter than it did in the same quarter a year ago-a notable number in an industry growing by leaps and bounds.
