GERMAN engineering group Siemens yesterday reported a big jump in pre-tax profits despite a sales slump.
Siemens has cut its workforce by 22,000 in the past year as well as slashing its administration costs by €2bn (£1.7bn).
Its profit rose 23 per cent in the first quarter to €1.48bn from €1.2bn in the same period a year ago. But revenue fell to €17.4bn from €19.6bn, largely due to a decline in the industrial sector.
Chief executive of the Munich-based company Peter Loescher said: “The actions we took at a very early stage are now cushioning us from the ongoing repercussions of the global recession. Earnings for the first quarter provide a gratifying snap-shot of the current situation.”
But he warned that the global economy remained unstable, and he was cautious on the outlook for the year.
He said: “Even though we have every reason to be satisfied with our first quarter, we remain cautious. Adjustment measures in specific businesses and single locations are unavoidable.”
Analysts had forecast a profit of €950m on sales of €17.9bn.
Loescher also said that uncertainty over US healthcare reforms had hit the medical instruments side of its business.
Earlier in the week Siemens was chosen as the preferred bidder for the biggest order of new trains in the history of Deutsche Bahn, Germany’s national rail operator.
Analyst Ingo Martin Schachel of Commerzbank said he expected Siemens to revise its forecasts on the back of yetserday’s profit boost.
He said: “I regard it as likely that Siemens will revise upwards the forecasts rather than revising them downwards.”