• Siemens Energy has increased its forecast for comparable sales for the full year from a range of 3-7% to a range of 10-12%.
• The company sees its profit margin before special items to be between -1% and 1%, compared to previous predictions of -2% to 1%.
• For the second quarter, revenue was reported at EU8.28 billion, which signifies a 3.1% increase year-over-year, matching the estimate.
• Gas Services revenue fell by 7% y/y to EU2.64 billion, but this is lower than the estimated EU2.8 billion.
• Grid Technologies sector experienced an impressive revenue upsurge of 26% y/y to reach EU2.20 billion, surpassing the estimate of EU2.08 billion.
• The Transformation of Industry sector generated EU1.27 billion in revenue (+10% y/y).
• Siemens Gamesa Renewable Energy reported a decline in revenue of -5.1% y/y to EU2.31 billion, lower than the estimate of EU2.42 billion.
• Profit before special items was EU170 million, significantly higher than the EU41 million recorded the previous year and outpacing the estimate of EU40.7 million.
• Orders came in at EU9.47 billion, which represents a drop of -23% y/y. This is below the estimate of EU10.58 billion.
• Siemens Energy’s net income was reported at EU108 million, as opposed to a loss of EU189 million year-over-year.
• Earnings per share (EPS) was EU0.080 as against a loss per share of EU0.25 in the previous year. The EPS was above the estimated EU0.05.
• Due to a strong business performance in the first half of the year, the company has risen the comparable revenue forecast.
• The company has also revised upwards the lower end of its profit margin (pre-special items) goal for the full year.
• Gamesa’s CEO, Jochen Eickholt, will step down by mutual agreement on July 31 and leave the company on September 30.
• Vinod Philip will take on the role of CEO of Gamesa as of August 1, succeeding Jochen Eickholt.
Siemens Energy AG on Smartkarma
Analysts on Smartkarma are closely monitoring Siemens Energy AG, with a notable report by Jesus Rodriguez Aguilar focusing on the company’s wind business through Siemens Gamesa Renewable Energy. The analysis highlights efforts by Siemens Energy to enhance profitability by addressing quality issues and boosting offshore operations. Despite these initiatives, Gamesa still grapples with financial difficulties and uncertain visibility. The report suggests a cautious stance, with a bearish sentiment due to ongoing challenges and limited progress in reaching profitability targets.
According to Jesus Rodriguez Aguilar‘s research on Smartkarma, Siemens Energy’s restructuring process continues after years of losses, with a projected net loss of €2 billion expected for FY 2024. The report points out the cautious approach taken by top Spanish financial institutions, signaling the challenges ahead for Siemens Energy. With uncertainties surrounding the wind business and execution risks contributing to limited visibility, the recommendation is to adopt a conservative valuation approach and consider shorting the stock with a target price of €9.76.
A look at Siemens Energy AG Smart Scores
| Factor | Score | Magnitude |
|---|---|---|
| Value | 3 | |
| Dividend | 1 | |
| Growth | 2 | |
| Resilience | 4 | |
| Momentum | 5 | |
| OVERALL SMART SCORE | 3.0 |
Smart Score is a compound score for the Company indicating its overall outlook. It is derived by taking an equally weighted average of underlying Factor scores computed by Smartkarma
Siemens Energy AG, a leading renewable energy company, is positioned for long-term success based on the Smartkarma Smart Scores assessment. With a strong momentum score of 5, the company is showing positive trends in its market performance, indicating potential future growth opportunities. Furthermore, Siemens Energy scores high in resilience with a rating of 4, showcasing its ability to weather industry challenges and maintain stability over time. This suggests a solid foundation for sustained performance and adaptability in changing market conditions.
While Siemens Energy AG demonstrates stability and growth potential, its dividend score of 1 implies lower returns for investors seeking income from dividends. However, the company’s overall value score of 3 and growth score of 2 point towards a balanced outlook in terms of investment potential. With a focus on power generation and transmission along with technical consultancy services, Siemens Energy is well-positioned to capitalize on the increasing global demand for renewable energy solutions, making it a strategic choice for long-term investors.
Disclaimer: This article by Smartkarma is general in nature and based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Note that our articles may not factor in the latest price-sensitive company announcements or qualitative material.
While all reasonable care has been taken in the preparation, Smartkarma makes no assurance about the accuracy of any generated data or content. All content is indicative only and should be independently checked for accuracy and confirmed before use. Smartkarma accepts no responsibility for any loss or damage caused as a result of any inaccuracy or error within the Lab online tools or generated data.
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