Siemens Energy's share price has dropped by 37%

Siemens Energy's share price has dropped by 37% as a result of the Siemens Gamesa acquisition. Siemens Gamesa, the Spanish wind generation unit, is increasing the parent firm Siemens Energy's load. Siemens Energy has dropped its full-year profitability projection due to unexpectedly significant expenditures associated with quality issues. Revenue guidance and assumptions for Gas Services, Grid Technologies, and Industry Transformation remain unchanged.

Siemens Energy mentions a technical examination of the installed fleet and product design in its release. According to the current situation, reaching the requisite product quality for some onshore platforms would cost much more than originally projected. Potential quality-related actions and expenses are still being assessed, but are projected to exceed one billion euros.

• Siemens Energy also examines the major assumptions driving the business plans. Furthermore, there are still challenges in scaling up production capacity in the offshore industry. As a result, the firm was obligated to retract the profit prediction for Siemens Gamesa and, by extension, Siemens Energy.

• In the context of reporting on the third quarter of the fiscal year, the group wants to give specifics and particular numbers.

• Siemens Energy forecasted a profit margin adjusted for special effects at the lower half of the expected range of 1 to 3 percent when the second-quarter numbers were released in mid-May.

• After taxes, the loss likely be in the low three-digit million range, exceeding the previous year's loss of 712 million euros. On a similar basis, growth is expected to range between 10% and 12%.

Siemens Energy's stock has plummeted.

Siemens Energy's stock has plummeted In XETRA trading on Friday, the Siemens Energy share plunged 37.34 percent to 14.65 euros. The prior day's low was even lower, at 15.02 euros, and the share was as cheap as last November. Trading was halted many times owing to high volatility. Energy has put pressure on the shares of Siemens, the company's largest shareholder. They are currently down 2.87 percent to 155.92 euros.

• A dealer described the situation as "extremely bad." How is the market meant to analyze that if you don't know where the costs are going, the store wonders? He talked of "complete insecurity."
• If the price loss for Siemens Energy remains the same after the close of trade, Siemens Energy would be one of the DAX's largest daily losses ever. In terms of market value, the loss is now estimated to be over six billion euros.
• A price drop of more than 30% for a Dax value is quite unusual. However, there have been a few titles in history that have lost even more, such as those of the payment processor Wirecard, which failed in 2020, or Hypo Real During the financial crisis, the estate was nationalized.

• Until the previous day, the papers had been among the DAX's top performers since the beginning of the year. They began the rise in mid-October and reached a high of 140 percent by the end of May. They have now, however, also fallen.
• below the 61.8 percent Fibonacci retracement support. This implies they've lost more than 61.8 percent of their gain since October, which is considered a major danger indicator for the overall trend. The papers have been in the red by 11% since the beginning of the year, putting them near the bottom of the DAX field.
• Many investors' dismay extended across the sector. For example, shares of wind turbine producer Nordex plunged 3.08 percent to 10.86 euros in the MDAX at times.

Course correction following another Gamesa profit warning.

Gamesa has thrown another wrench in the works for the parent company: The Siemens Energy share plunged by more than a third below €16 on Friday morning after the Munich-based business said that the Gamesa profits estimate for the current fiscal year 22/23 (by the end of September) had to be canceled entirely.

According to the data, ongoing quality issues in the land turbine industry result in much greater costs than planned. A re-evaluation of the wind turbine division would have shown that the faults may have cost more than €1 billion. The losses were anticipated to be less than €500 million in January. Christian Bruch, the CEO, wishes to offer a more specific estimate of the damage as soon as possible.

• The situation study has been finished, but not before the quarterly report on August 7th.
• In terms of the specific issue at Gamesa, there have been considerably increased failure rates for wind turbine components.
• Furthermore, ramping up production capacity in the high-yield offshore area remains tough, according to the report. Furthermore, Siemens Energy CEO Bruch had to confess that Gamesa's promised productivity benefits had not yet materialized to the level predicted.
• However, the business maintains the group's revenue projection as well as its assumptions for gas services, grid technology, and industry change. In terms of consolidated sales, the business anticipates 10-12% growth in comparable sales. Currency and portfolio impacts are not included.

Investor confidence has vanished in a single sweep.

Many investors were taken aback by Gamesa's latest earnings warning. Siemens Energy Management cut its projection for the Spanish business for the second time in the fiscal year and reported larger losses only in May when the half-year numbers were released. The market was clearly unprepared for yet another significant blow.

1. In one swift swoop, the Siemens Energy board of directors, led by CEO Bruch, squandered the trust that had been carefully restored over the previous year.
2. I reiterated my faith in the operational turnaround in this piece after the financial report a month ago.
3. At the same time, I plainly put a stop to the euphoria and warned of a harsh correction.

Nonetheless, Goldman Sachs confirms their buy vote for Siemens Energy.

Goldman Sachs has maintained its "Buy" recommendation on Siemens Energy, with a target price of EUR 31.70. New issues at Siemens Gamesa have cast a shadow on the energy technology group's revaluation tale, said analyst Ajay Patel on Thursday evening in an initial reaction to the retracted earnings forecasts. He considers the message to be "clearly negative."

Gamesa, a subsidiary of Siemens Energy, is a well-known problem, according to capital market analyst Jürgen Molnar of broker RoboMarkets.

Gamesa has so far proven to be a black hole on the balance sheet following the outright takeover at the beginning of the year. "Siemens Energy's future is increasingly dependent on whether it solves the challenge.

"I have control over my child." According to the expert, the present sell-off in Energy shares is bitter since the impressive recovery since last October has come to an abrupt halt.

• On Friday, no potential purchasers materialized who may take advantage of Siemens Energy's low pricing to enter the market. Green, a Bernstein analyst, also warns investors against it. In the worst-case scenario, if more than 30% of Gamesa's deployed systems are damaged, the company's stock price may plummet even more. Green determined that if Gamesa were rated zero, the fair value of Siemens Energy would be eleven euros.

• The next significant support in the price chart, according to market observer Alexander Paulus of the Stock3 stock exchange service, is EUR 14.37.

• as well as EUR 13.36. The papers would still have some space till then. In general, he says that following such price drops, "let the shares settle down first" and wait for the first attempt to bottom out. During a selling frenzy, chart supports would rarely have any influence.

Siemens Energy continues to be unconcerned about the wind industry.

Even in light of recent quality issues at the subsidiary Gamesa, Siemens Energy's management does not fundamentally challenge the wind energy sector. In a telephone news conference, CEO Christian Bruch stated that he couldn't see why the wind turbine maker couldn't develop a balanced risk/opportunity profile. Of course, it was "bitter for us" to surprise the market with another earnings warning. However, wind energy is required as part of the energy shift, he stressed.

1. On Thursday evening, Siemens Energy unexpectedly scrapped its profitability projection, which had already been slashed twice in the current fiscal year, citing new quality issues with previously installed onshore wind turbines. Some components had "significantly increased" failure rates, it was discovered.
2. said. Repair and replacement will almost certainly cost more than a billion euros.

Because Gamesa has been producing issues for years, the Siemens Energy share lost 35% of its value at the start of trade this morning. The parent business just spent over 4 billion euros to obtain complete control of Gamesa. This is not an error, according to Bruch. The cost was also affordable. However, it will be revisited and deliberately reviewed.

• Jochen Eickholt, the leader of the wind industry, stated at a news conference that the issues were worse than he had anticipated. A fresh team has now taken a thorough look at the complete installed Mistral system as part of the program's restructuring.

• fleet. Further irregularities were discovered in younger systems, such as bearings and rotor blades. However, according to Eickholt, these are merely a few isolated incidents that are extrapolated using statistical models given the installed base of thousands of wind turbines and guarantee contracts, some of which are over 20 years old.

• Bruch claimed to have conducted the "most substantiated analysis of the existing fleet" ever. Siemens Energy aims to tell the capital market about the implications for earnings when the third-quarter statistics are released at the beginning of August, as it has not yet been finished. Eickholt expects the expenditures to accumulate over time and that certain components can be substituted with campaigns. In most cases, repairs will be available.

• the systems on location. Gamesa also wishes to leverage component suppliers for cost savings whenever possible.

Siemens Gamesa is likewise struggling to expand capacity in the brisk offshore market for offshore wind projects. In several circumstances, halls could not be built on time because components such as cranes were unavailable. When it comes to hiring new personnel, the labor scarcity is palpable. The corporation intends to grow offshore component manufacturing by 30%. Siemens Energy AG selected leverage products With knock-outs, speculative investors can share in price changes disproportionately. Simply pick the desired lever, and Siemens Energy AG will provide compatible open-end items.