Turbine troubles have sent wind energy stocks tumbling — and a slew of issues remain
As the biggest players in wind energy gear up to report quarterly earnings, supply-chain reliability issues are front and center for both stock analysts and industry leaders.
Siemens Energy made the headlines earlier this year when it scrapped its profit forecast and warned that costly failures at wind turbine subsidiary Siemens Gamesa could drag on for years.
It sparked concerns about wider problems across the industry and thrust Europe's wind energy giants' earnings into the spotlight.
Siemens Energy is set to report its fiscal fourth-quarter results on Nov. 15. Its shares are currently down more than 35% year-to-date.
Aside from the turbine problems, the German energy giant posted orders of around 14.9 billion euros ($15.7 billion) 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.
Ahead of its 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.»
«We expect Siemens Gamesa to suffer very weak order intake in H1, which will combine with extensive delivery delays and rising customer penalty payments. Challenges at Siemens Gamesa will continue to overshadow resilience in the group's other divisions,» they added.
Morgan Stanley cut its price target for Siemens Energy from 20 euros per share to 18 euros per share, but retains an overweight long-term strategic position on the company's stock.
«Valuation for
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