One thing stands out and that is the loss in [fixed-line networks] and that is probably a lot lower than a lot of people had feared

Simon Scholes, Bankgesellschaft

And the firm said it was "solidly in the black" at the operating level, crediting its performance largely to a cost-cutting programme, which has already triggered more than 20,000 job cuts.

More cuts may still be in the pipeline for the underperforming fixed-line telecoms network business, which - according to chief executive Heinrich Pierer - "is currently reviewing the scope of its restructuring programme, especially concerning its US operations".

ICN, as the business is known, lost 124m euros, compared with a 150m euro profit the year before.

But the company said it still thought the hard-hit mobile phone business was on the mend, after experiencing torrid market conditions last year.

Analyst reaction

Siemen's latest earning figure was well down on the 1bn euro profit reported for the last three months of 2000.

But the market greeted the data with relief, helping Siemens stock up 4% in early trading. The shares had handed back most of their gains by lunchtime.

"They are pretty good figures," said Simon Scholes, of Bankgesellschaft in Berlin.

"One thing stands out and that is the loss in ICN, and that is probably a lot lower than a lot of people had feared. That is their main problem child at the moment, so I think that is pretty positive as well."