Scandal-hit German engineering group Siemens thrilled the stock market on Thursday with a sharp increase in its third quarter net profit but the result was unlikely to calm restive shareholders.
Siemens chief executive Peter Loescher confirmed the bank's outlook for the full fiscal year, "growing revenues at least twice as fast as global GDP (gross domestic product) and growing group profit from operations at least twice as fast as our revenues."
He also told a news conference the company did not expect to be seriously affected this year by the US subprime housing market crisis. Siemens made no direct comment in its statement but noted costs of 127 million euros in the last three months of 2007 for legal and investigative fees.
According to the daily Sueddeutsche Zeitung's Thursday edition, which quoted sources close to the company's supervisory board, more dubious payments, worth around 140 million euros, had been found in the firm's medical equipment division.
Up till now, Siemens has said such payments totalled around 1.3 billion euros. The company's financial director Joe Kaeser told media that the 140 million euros figure was "not new" and that it had been factored into the group's accounts for its last fiscal year.
Net profit leapt from 788 million euros (1.15 billion dollars) to 6.5 billion owing to the sale of the auto equipment parts company VDO, which contributed around 5.4 billion euros to the results, a statement said.
Operating profit in the third quarter which began on October 1, increased by 16 percent to 1.7 billion euros, on sales which grew by 10 percent to 18.4 billion. On the Frankfurt stock exchange, which was coming up for air after heavy losses on Monday and Wednesday, Siemens shares gained more than six percent in early trading.