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Siemens Energy shares rise on strong order growth

Published 13/11/2024, 08:40 pm
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Investing.com -- Shares of Siemens Energy AG (ETR:ENR1n) rose following the company’s fourth-quarter results, which reported strong order growth and met full-year expectations.

At 4:38 am (0938 GMT), Siemens (ETR:SIEGn) Energy was trading 1.1% higher at €179.86.

Siemens reported orders for the quarter at €15 billion, marking a 42% organic increase and beating analyst expectations by about 23%. 

This growth was led by the Grid Technologies division, with substantial order increases across all segments.

Quarterly revenue reached €9.7 billion, a year-over-year organic increase of 16.6%, aligning closely with analyst projections. 

Siemens Energy's adjusted EBITA loss for the quarter was -€83 million, yielding a margin of -0.9%, slightly narrower than the consensus loss estimate of -€95 million at a -1% margin. 

Margins for Gas Services fell just below estimates, but were counterbalanced by slight outperformance in the Grid Technologies and Transformation of Industry divisions.

Siemens Energy outlined updated guidance for fiscal year 2025, targeting organic sales growth of 8-10% compared to analysts’ expectations of around 7%. 

The company now anticipates an adjusted EBITA margin between 3% and 5%, which is broadly in line with market forecasts. 

Segment-specific outlooks are similarly positive, with Gas Services expected to achieve 7-9% growth, well above consensus estimates of 5.8%, alongside a steady margin forecast. 

Grid Technologies is projected to grow 23-25% organically, with Transformation of Industry expected to see 11-13% growth—both above analyst expectations.

Long-term targets were also updated, pushing Siemens Energy’s mid-term goals from fiscal year 2026 to 2028, with plans to achieve high-single to low-double-digit revenue growth and a 10-12% EBIT margin, both above consensus estimates. 

“We estimate the mid-point of the new 2028 guidance (€5.55bn 2028 EBITA) is 21% ahead of current Visible alpha consensus, and 10% ahead of our 2028 forecast,” said analysts at Morgan Stanley (NYSE:MS) in a note, reiterating their “overweight” rating.

The company also has reiterated their target to achieve break-even margin for Siemens Gamesa division by fiscal year 2026. 

“We do not expect material changes to consensus expectations on the back of these results,” said analysts at UBS in a note. 

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