Siemens Energy AG’s profit warning led to a 36 percent drop in share price, marking its worst one-day performance ever. Siemens Energy warned on June 22 that the impact of quality problems at its Siemens Gamesa wind turbine business would be felt for years and were not yet quantifiable. The shares of Siemens Energy tumbled in trade.
Siemens Energy, which supplies equipment and services to the power sector, scrapped its 2023 profit outlook late on June 22 after a review of its wind turbine division exposed deeper-than-expected problems that could cost more than 1 billion euros ($1.09 billion).
"Even though it should be clear to everyone, I would like to emphasise again how bitter this is for all of us," Siemens Energy CEO Christian Bruch told.
"Given the history and nature of the wind industry, the profit warning was not a complete surprise, but what surprised us was the magnitude," analysts at JP Morgan said.
Issues at Siemens Gamesa have been a drag on the parent for a long time, prompting Siemens Energy to take full control of the business after only partially owning it for several years.
The Stoxx 600 Index was down 0.15 percent as of 8:12 in London, and was set for its worst weekly drop since mid March. Energy and industrials lead the declines, while defensive sector like healthcare and telcos outperformed. Siemens Energy AG slumped after it took back its profit guidance due to mounting issues at its Spanish wind-turbine unit.
European stocks fell for the fifth day, extending their longest losing streak since December, as sentiment has soured following hawkish signals from central banks.
