Siemens Slips Unexpectedly Deep into the Red

Siemens, the German IT group, slipped surprisingly far into the red in the
third quarter due to problems in its core business and to one-time charges.

The company reported Wednesday in Munich that, without taking into account the
losses of its chip subsidiary Infineon, and without one-time effects, its
loss after taxes in the third quarter of fiscal year 2000/01 amounted to EUR
489 million (US$429 million). The reason for this was the “weakening economic environment.”
CEO Heinrich von Pierer called the performance “unsatisfactory.” The group
result for the entire year 2001 will “be below the level of the previous
year,” Pierer said.

Thanks to the transferal of Infineon shares to a pension fund and the
resulting input tax proceeds of EUR 3.459 billion, the group still obtained
a net gain of EUR 1.6 billion. The group stressed that, taking Infineon and
any one-time effects into account, the result is a plus of EUR 1.608

In the first nine months, the result after tax without Infineon and without
one-time effects was more than halved to EUR 652 million (US$573 million). The group
originally announced a double-digit increase in turnover and
disproportionately high profit growth both with and without Infineon. These
goals were gradually retracted. The goals published in December 2000 for the
year 2003 are said to still be valid, however.

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