Siemens Gamesa lowers earnings outlook but orders soar

·1-min read
The Siemens Gamesa logo is displayed outside the company headquarters in Zumudio near Bilbao

MADRID (Reuters) - Wind turbine maker Siemens Gamesa warned on Friday it could earn less this year than previously expected, cutting 700 million euros ($842 million) off the top end of its previous revenue guidance even as orders hit a record high.

Strong competition, high raw materials prices, disruptions linked to COVID-19 and a slowdown in India have been squeezing Siemens Gamesa's earnings, but market enthusiasm for companies driving the transition to a low-carbon economy has supported its market value.

The leading producer of offshore generators now expects full-year revenue of 10.2-10.5 billion euros, from a previous target of 10.2-11.2 billion euros, hit by customers deferring projects and the ongoing impact of COVID-19 in India and Brazil.

Execution delays, higher costs for raw materials and a lower contribution from the higher-margin offshore division also contributed to the cut, the company said.

It nevertheless maintained guidance for an operating margin over sales before interest, tax, and some other costs, of 3%-5%.

With global demand for renewably-produced energy on the rise, Siemens Gamesa logged new orders worth 5.5 billion euros between January and March, its largest-ever intake for a single quarter.

Shares in the company, whose main shareholder is Siemens AG unit Siemens Energy, now trade at almost double their pre-pandemic levels.

($1 = 0.8311 euros)

(Reporting by Isla Binnie, editing by Louise Heavens)