Siemens Seems Secure, Despite Bribery Suspicions - Barron's

| About: Siemens AG (SIEGY)
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Annotated article summary from this weekend's Barron's. Receive all our Barron's summaries by signing up here:

As Scandal Swirls, Siemens Stock Stays Hot by George Frey

Summary: Siemens' (SI) restructuring has been a success story: CEO Klaus Kleinfeld, who took the reins two years ago, has made the global industrial powerhouse more efficient. Kleinfeld has steered the giant, that makes everything from trains to light bulbs, in new growth directions including energy and environmental care, public and industrial infrastructure, and health care. Its focus on emerging markets and an aging population have involved such moves as the acquisition of Bayer's (BAY) diagnostic health-care business and a merger of Siemens' wireless network business with Nokia (NYSE:NOK). The results show: Shares are up more than 25% since October, and all of the company's 12 divisions were in the black in FQ1 2007 for the first time in six years. Operating profits were up 51% from the previous year, and net rose 35% for all of fiscal 2006. One looming question remains: Suspicions that over the years Siemens has been bribing its way into contracts worldwide, to the tune of about $500 million, could prove to be a formidable challenge. The company has promised to provide controls to ensure ethical behavior going forward. Barron's Bottom Line: "With profits and revenue up, Siemens' stock should climb at least 10% this year. But all bets are off if the scandal reaches Kleinfeld, the architect of the company's revival."

Related: Siemens CEO says bribery affair has no negative impact on current business [Forbes]German ETF: A Pleasant SurpriseSiemens to Buy UGS for $3.5 Billion, Sources Claim

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