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Siemens Energy (OTCPK:SIEGY) (OTCPK:SMEGF) on Friday lowered 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.