Siemens Gamesa Shares Drop on Profit Warning as Siemens Energy Also Slips
July 15 2021 - 4:19AM
Dow Jones News
By Joshua Kirby
Shares in Germany's Siemens Energy AG and its Spanish subsidiary
Siemens Gamesa Renewable Energy SA fell sharply in opening trade
Thursday after the latter issued a profit warning for the fiscal
year, leading Siemens Energy to also lower its outlook.
At 0745 GMT, shares in Siemens Energy traded 8.3% lower at
EUR23.65, while Siemens Gamesa was down 14% at EUR22.66.
Late Wednesday, Siemens Gamesa said it now expects an adjusted
earnings before interest and taxes margin of minus 1%-0%, from
3%-5% previously, after booking an adjusted operating loss of 150
million euros ($177.6 million) in the third quarter of the fiscal
year on higher provisions. The renewables company also expects
full-year revenue to be in the lower end of a guided range of
EUR10.2 billion-EUR10.5 billion.
On the back of the results and guidance downgrade at its
subsidiary, Siemens Energy in turn said it expects to miss its
targeted adjusted margin for earnings before interest, taxes and
amortization before special items for fiscal 2021 of 3.5%-5.5%. The
energy company also expects third-quarter results to fall short of
current market expectations.
Siemens Gamesa's third-quarter results were weak, while the
guidance downgrade implies further difficulties in the year's final
quarter, and will inflame investor concerns over the impact on
margins of rising raw-material prices, analysts at Citi said.
"It is likely that investor questions will focus on the extent
of any further pressure on margins for projects already in the
backlog, since there had been greater concern around the impact of
raw materials on margins for newly-ordered projects," the bank
said.
Write to Joshua Kirby at joshua.kirby@wsj.com;
@joshualeokirby
(END) Dow Jones Newswires
July 15, 2021 04:14 ET (08:14 GMT)
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