Siemens Energy stock crashed on Friday: ‘I’d imagine they can climb back’
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Shares of Siemens Energy AG (ETR: ENR) lost about 35% this morning after the German firm withdrew its profit guidance for fiscal 2023.
Siemens Energy stock hit on warning of costly issues
On Friday, the energy technology company said a technical review of Siemens Gamesa found a significant increase in failure rate of its wind turbine components.
Costs related to improving the product quality, it added, are expected to surpass €1.0 billion ($1.09 billion). On CNBC’s “Street Signs Europe”, Nicholas Green of Alliance Bernstein said today:
I’d imagine they can climb back from it. With luck, when they report in August, they’ll have put some brackets around the cost. But certainly, it is an alarmingly large hit.
The stock market news arrives a month after Siemens Energy reported a net loss of €189 million in its second financial quarter.
Siemens Energy AG maintained its revenue guidance
The Munich-headquartered company also pulled its full-year assumptions for Siemens Gamesa but left the assumptions for Grid Technologies and Gas Services untouched on Friday.
Siemens Energy maintained its guidance for revenue as well today. According to the Head of European Capital Goods at Alliance Bernstein:
They have indicated it’s 15% to 30% of installed fleet where these component failures may be occurring. But it does leave a slight question mark as to where that liability ends.
The German firm acquired Siemens Gamesa in December of 2022. Siemens Energy stock is now down roughly 40% versus its year-to-date high in late May.
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