Frankfurt: Industrial conglomerate Siemens AG said on Tuesday its first quarter net profit fell 81%, largely due to one-time effects stemming from the sale of its VDO Automotive business last year.
The Munich-based maker of products ranging from trains to light bulbs said net profit for the quarter from October through December fell to €1.23 billion ($1.62 billion) from €6.475 billion a year ago. However, the sale of VDO and other assets had contributed €5.4 billion to income last year.
First quarter revenues rose 7% to €19.6 billion from €18.4 billion a year ago, while the company’s order book for the period fell 8% to €22.2 billion.
The company said it was sticking to its target for reaching total sector profit earnings at the industry, energy and health-care divisions of between €8 billion and €8.5 billion in 2009.
“Siemens got off to a good start in fiscal 2009, including better order development than most of our competitors in the first quarter,” the company’s chief executive Peter Loescher said in a statement.
Siemens said its industry segment led the company’s earnings for the quarter, with profit of €907 million, though it was 9% lower from €994 million a year ago. Siemens said that within the industry segment, automotive was strongest, but that profitability had fallen due to lower volume and a less favorable product mix.
The energy segment saw profit of €756 million, well above the year-ago figure. Fossil fuel power generation contributed the most to those profits, as year-ago results were hampered by charges. Strong order backlogs at renewable energy and oil and gas enabled both divisions to raise revenue, increase capacity utilization and significantly improve margins, Siemens said.
The health care sector saw profit increase to €342 million, where imaging and the IT division was one of Siemens top profit contributors in the quarter.
Siemens said on Monday it has decided to pull out of a nuclear power plant joint venture with French company Areva SA by 2012, citing a lack of “entrepreneurial influence.”
Siemens said last week it would consider dropping its 34% stake in the venture, Areva NP. On Monday, it said the company would terminate its shareholder agreement with Areva by 30 January 2012, and sell the stake to the French company, which owns the remaining 66%.
It said that the purchase price of its stake would be agreed by the two companies on the basis of their shareholder agreement.
Siemens said it “will further evaluate all available options to continue its commitment in the nuclear power plant business.”
On Monday, Siemens shares closed up 4.4% at €43.54 in Frankfurt trading.