Siemens Shares Recover Ground After Initial Q3 Results-Induced Fall

By Scott Kanowsky 

Investing.com -- Siemens AG Class N (ETR:SIEGn) shares made up for an early downturn on Thursday to trade higher, after the engineering and technology group reported third quarter order growth despite its net result slumping to a loss for the first time in 12 years.

The Munich-based firm fell to a loss of €1.5B during the period, reversing a profit of €1.48B in the first three months of 2021, although revenue came in above estimates.

Orders also climbed by 7% year-on-year up to €22B. An analyst at RBC Capital Markets called this uptick a sign of "strong order momentum" across Siemens' core businesses.

But dragging earnings into the red was chiefly a €2.7B impairment of the group's stake in Siemens Energy AG (ETR:ENR1n), which was spun off in 2020.

Siemens Energy has been struggling to address weakness at the Spain-listed wind turbine business Siemens Gamesa Renewable Energy SA (BME:SGREN), in which it has a 67% stake. Gamesa has itself been impacted by the problematic rollout of a new onshore wind turbine and supply chain constraints that have contributed to an uptick in the costs of contracts.

Charges related to the winding down of Siemen's operations in Russia in the wake of the war in Ukraine also hit net income.

Meanwhile, the group slashed its annual earnings per share guidance to between €5.33 and €5.73, down from between €8.70 to €9.10.

However, Siemens chief executive Roland Busch said the group is looking to capture "significant" market opportunities spurred on by high demand.

"We have the right offerings and the right strategy to be successful even in uncertain times,” Busch added.