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Siemens Energy Raises Cash Flow Guidance After Strong Start

Jan 28, 2025 - financialpost.com
Siemens Energy AG has raised its cash flow guidance for the year after surpassing analysts' revenue and profit expectations in its first quarter. The company now anticipates pretax free cash flow to exceed its previous guidance of up to €1 billion, reporting €1.53 billion in the three months through December. This strong performance was driven by increased demand for grid technologies, including circuit-breakers, transformers, and battery storage systems, particularly in the US. Despite a 20% drop in shares due to a new AI model release by Chinese startup DeepSeek, analysts like Deutsche Bank's Gael de-Bray see this as an overreaction and a potential buying opportunity.

Siemens Energy's shares have more than tripled over the past year, reflecting progress in resolving issues with its wind-turbine unit and growing demand for its products. The company plans to update its cash-flow guidance with its half-year results on May 8. The recent surge in orders is attributed to the boom in artificial intelligence, which is driving the construction of power-intensive data centers. Despite the recent share price drop, the company's results were stronger than expected, with profit before special items reaching €481 million, surpassing analyst estimates of €404 million.

Key takeaways:

  • Siemens Energy AG increased its cash flow outlook for the year after exceeding analysts' revenue and profit estimates in its first quarter.
  • The company now expects pretax free cash flow to surpass its previous guidance of up to €1 billion, with shares rising as much as 5.1% in early trading.
  • Siemens Energy shares have more than tripled in value over the past year due to progress in its wind-turbine unit and increased demand for grid technologies.
  • Pretax free cash flow reached €1.53 billion, and profit before special items was €481 million, both beating analyst estimates.
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