SIEGY - Siemens Energy cuts full-year profit guidance on wind turbine problems

Siemens Energy ( OTCPK:SIEGY ) ( OTCPK:SMEGF ) on Friday cut its FY 2023 profit forecast after faulty components at the wind turbine fleet of its Siemens Gamesa ( OTCPK:GCTAF ) ( OTCPK:GCTAY ) business raised warranty and maintenance costs.

Various problems affecting both onshore and offshore turbine components knocked €472M (~$512M) from Siemens Gamesa's ( OTCPK:GCTAF ) ( OTCPK:GCTAY ) FQ1 operating profit, with CFO Beatriz Puente saying the negative impact on cash flow would last as long as eight years.

As a result, Gamesa ( OTCPK:GCTAF ) ( OTCPK:GCTAY ) said it recorded a preliminary Q1 EBIT loss of ~€760M, and Siemens Energy ( OTCPK:SMEGF ) forecasts its net loss in FY 2023 will roughly equal last year's €647M loss, after previously expecting its full-year loss to narrow sharply.

Siemens Energy ( OTCPK:SMEGF ) said it expects profit margin before special items of 1%-3% in the year through September, down from a previous forecast of 2%-4%.

The company maintained guidance for 3%-7% sales growth excluding currency translation and portfolio effects, and raised its forecast for pretax free cash flow, expecting it to turn positive.

Siemens Energy ( OTCPK:SMEGF ) is "a better long-term investment" than Siemens ( OTCPK:SIEGY ), Wolf Report writes in an analysis published recently on Seeking Alpha .

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