Much like other businesses that have grown adept at stoking the bottom line even as sales decline, diversified engineering and automation giant Siemens today reported a 12% drop in revenue in its Q1 but a 24% improvement in net income.
For the fiscal 2010 first quarter, ended Dec. 31, 2009, Siemens reported revenue of €19.63 billion, down 12% from the first quarter of 2009. New orders slumped 15% to €18.98 billion. But net income shot up 24% to €1.53 billion, from €1.23 billion in the prior-year period.
The company attributed the earnings spike to “good cost management and a favorable revenue mix with, for example, an increase in the proportion of service activities. At the same time, there was a substantial reduction primarily in sales and administrative costs.”
Of Siemens’ three main divisions, Industry exerted the most drag on the quarter, with revenue off 13% to €8.07 billion and new orders down 16% to €8.25 billion. The declines came as a result of sharply lower sales in the Drive Technologies, Industry Solutions, Building Technologies, and Industry Automation units. Profit in the division slipped 2% to €911 million from its year-earlier total of €934 million.