Ahead of Siemens Energy's fourth-quarter earnings, analysts at Kepler Cheuvreux suggested in a research note Tuesday that despite having already warned on profits, the company"remains vulnerable to large negative cashflow swings in the next fiscal year."
Aside from the turbine problems, the German energy giant posted orders of around 14.9 billion euros for its third quarter, a more-than 50% increase from the previous year, primarily driven by large orders at Siemens Gamesa and Grid Technologies. Yet the 2.2 billion euro charge due to Gamesa's quality issues prompted Siemens Energy to forecast a net loss for the fiscal year of 4.5 billion euros.
"Valuation for Siemens Energy is currently factoring in a negative value for the Gamesa division, which we believe may have been over penalized," Morgan Stanley capital goods analyst Ben Uglow said in a research note Monday. "Survey participants are now citing delays on new projects due to longer lead times for supply of new turbines and significant price increases," Crowther said in the report.