Most of the executives at Siemens (SI) are being dragged off in handcuffs as part of the prosecutions in the company’s bribery scandal. But, the few managers who remain are doing a spectacular job. If they can avoid any more police raids, the conglomerate should do very well.

Siemens’ earnings beat expectations. According to the FT, "Europe’s biggest engineering group said it increased profit of its three sectors year-on-year by 33 per cent to €2.084bn, more than analysts had forecast." The company also said that it believes that it can increase revenue at a rate significantly faster than that of the global economy.

Over the last two years, Siemens shares are up 40% while US-based conglomerate GE’s shares are off nearly 20%. Over that time, SI has been in the jaws of its legal problems and has changed its CEO.

Siemens has focused its businesses into three groups: energy, healthcare, and industrial. It has avoided being in unrelated operations like media. The market’s perception, accurate or not, is that Siemens has occasionally been unscrupulous, but it is more focused than GE and thus has a better chance of doing well in the industries it has picked to drive its growth.

While it may be easy to hammer Siemens’ ethical lapses, it is hard to bash what it squeezes out of its assets.

Douglas A. McIntyre

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