Industrial engineering giant Siemens has posted a modest fall in profits, but warned that sales and orders were down sharply.

The firm, which is involved in businesses from mobile phones to power generation technology, made a net profit of 521m euros (�345m; 558m) in the last three months of 2002, down from 538m in the same period a year earlier.

The earnings figure was better than many analysts had been expecting, and the fall was mainly the result of one-off accounting adjustments.

But while Siemens has remained profitable thanks to swingeing cost cuts, it warned that the outlook for sales remained poor.

During the quarter-year, revenues were down 10%, and orders fell by 21%, and the firm said its expected no improvement in 2003.

Ups and downs

With its businesses spread across so many sectors, Siemens individual subsidiaries enjoyed mixed fortunes.

Its mobile technology businesses generally performed well, with its once-troubled ICM telecoms unit increasing profits during the quarter.

But ICN, its fixed-line telecoms unit, plunged further into the red, raising fears of yet more job losses and cutbacks.

And while the firm's core power generation subsidiary posted an increase in profits, its sales were among the hardest hit in the group, down 16% as international clients scaled back on investment plans.