ENR Siemens Energy AG

   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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