Siemens Has Changed The Tone, But Can It Deliver?
Stephen Simpson, CFA
Stephen Simpson, CFA
Mon, Jun. 20, 11:48 AM
- Siemens’ (OTCPK:SIEGY +2.7%) $11B wind power turbine merger with Gamesa (OTCPK:GCTAY -1.7%) creates a market giant to rival Vestas Wind Systems (OTCPK:VWDRY) and GE but faces a challenge in harnessing planned savings, according to analysts at Barclays and Morgan Stanley.
- Barclays expects only a fraction of the planned 70M revenue synergies will be achieved, and does not believe the onshore and offshore businesses offer "any sort of synergy potential" in sales, as the two businesses deal with different customers, technology and drivers.
- Siemens and Gamesa have identified €230M in cost cuts within four years, and while the product synergies “are clear,” achieving that target remains a risk, Morgan Stanley analyst Ben Uglow says.
- Nevertheless, Stanley rates Siemens a Buy as "in terms of product overlap, Siemens brings a number one position in offshore turbines [and a] strong offering in developed markets.”
Tue, Feb. 9, 11:49 AM
- Siemens (OTCPK:SIEGY +0.2%) is close to a deal to combine its wind business with Gamesa (OTCPK:GCTAF +7.6%), which would create world's largest wind turbine maker, Bloomberg reports.
- SIemens is the global leader in wind turbines designed for use offshore, while Gamesa specializes in onshore wind; together, the combined companies would have ~15% of the global wind market, exceeding Vestas Wind's (OTCPK:VWDRY) 10% share and GE’s 11%.
- Siemens also is holding talks about buying Iberdrola’s (OTCPK:IBDRY -0.6%) 20% in Gamesa, according to the report.
Mon, Jan. 25, 2:22 PM
- Siemens (OTCPK:SIEGY +2.8%) raises its FY 2016 earnings forecast after the euro's decline helped it beat market expectations for FQ1 industrial profit, revenue and orders,
- Siemens says its net profit for the period ended Dec. 31 was €1.53B, vs. €1.1B in the year-ago period and ahead of analysts’ expectations of €1.08B, on an 8% Y/Y increase in revenue to €18.89B, while new orders jumped 27% to €22.8B, boosted by an €8B power generation contract in Egypt; industrial profit rose 10% to €1.99B, beating the €1.87B consensus estimate, with profit margin rising to 10.4% from 10.2% a year earlier.
- The company now expects EPS of €6.00-€6.40 ($6.50-$6.93), up from its previous forecast of €5.90-€6.20, for the year ending next September.
- Siemens also confirms earlier reports that it acquired software maker CD-adapco for $970M.
Jul. 30, 2015, 12:58 PM
- Siemens (OTCPK:SIEGY +2.8%) is higher after reporting a slight decline in FQ3 net profit to €1.36B ($1.49B) from €1.37B in the year-ago quarter, but the result is clearly better than the analyst consensus forecast of €1.03B.
- Siemens also is sticking to its full-year outlook, saying it expects a strong FQ4 despite a softening market outlook.
- FQ3 revenues gained 8% to €18.84B on strong growth in the company’s health care, energy management, digital factory and building technologies units; new orders rose 4%, helped by a €1.6B long-term train maintenance order in Russia at Siemens Mobility.
- FQ3 industrial profit margin of 9.5% was down from 10.1% a year ago, as profitability in the health care and energy management divisions slightly offset profit declines at the power and gas business, but analysts had expected a profit margin of 9.2%.
- Profit at the power and gas unit sank 47% to €289M, partly hurt by €106M in charges connected with one project’s higher material costs and customer delays, as well as lower margins in the gas turbine business and higher selling and R&D expenses.
Jul. 29, 2015, 2:19 PM
- Bombardier (OTCQX:BDRBF +7.6%) says it is sticking with a tentative plan for an IPO of its rail business in Q4, and refutes an earlier report of merger talks with Siemens (OTCPK:SIEGY +0.2%) over the unit.
- An IPO or sale of the rail unit would help Bombardier pare debt that ballooned to more than US$9B during development of the CSeries jet, which has been delayed by more than two years and is ~US$2B over budget.
Jun. 3, 2015, 11:28 AM
- Siemens (OTCPK:SIEGY +2.8%) says it has signed an €8B ($9B) deal with Egypt to supply gas and wind power plants designed to boost the country's power generation by 50%.
- Siemens says it is its single biggest order ever, and provides a much-needed boost to its struggling gas and power division.
- Siemens will deliver three ready-to-use gas-steam power plants with a capacity of 4.8 GW each, as well as up to 12 wind parks and ~600 wind turbines with a total capacity of 2 GW at the Suez channel and in the Western Nile region.
May 8, 2015, 2:29 PM
- Siemens (OTCPK:SIEGY +1.2%) is set to secure unconditional EU approval for its $7.6B bid for Dresser-Rand (DRC +1.6%), according to a Reuters report.
- The European Commission warned in February that the deal might reduce competition and drive up prices, but apparently it has not sent a statement of objections to Siemens, which reportedly would mean "unconditional clearance."
- Siemens' acquisition of the supplier of equipment such as compressors and gas turbines used to exploit shale resources would pose strong competition in the U.S. market for the likes of GE.
Apr. 15, 2015, 7:34 AM
- Molycorp (NYSE:MCP) is soaring 49.2% premarket after it was chosen by Siemens (OTCPK:SIEGY) to supply rare earth materials over the next 10 years for incorporation into the latter's high-efficiency wind turbine generators.
- MCP will supply the rare earth materials to Shin-Etsu Chemical (OTCPK:SHECY), which will produce the rare earth magnets Siemens intends to utilize in its turbines.
Mar. 19, 2015, 12:41 PM
- Siemens (OTCPK:SIEGY -5.4%) slumps after CEO Joe Kaeser tells investors that falling oil prices and operational difficulties are hurting profit and sales at the engineering company.
- Weakening demand for items such as gas turbines and oilfield equipment will lead to a “moderate organic revenue decline” in the company's FQ2, Kaeser says, adding that operational difficulties at the wind power and process industries units likely will weigh on the profitability of Siemens’ industrial business that quarter.
- Separately, a report from the German magazine Manager suggests the Siemens merger with Dresser-Rand (DRC -1.5%) could be in trouble.
Oct. 15, 2014, 2:22 PM
- Siemens (OTCPK:SIEGY -2.1%) says it is cutting more jobs in Germany, mainly in its energy division, but declines to confirm a report by German public radio that said ~1,200 jobs will be shed at several German energy locations.
- Siemens’ new energy chief Lisa Davis said earlier this month that she expects narrower profit margins in the power generation business to put pressure on the unit’s results over the next 2-3 years.
Sep. 19, 2014, 12:26 PM
- Renova, a holding company of Russian oligarch Victor Vekselberg, says it has bought a 4.99% stake in Dresser-Rand (DRC +10.2%), adding a twist to recent speculation on DRC's future.
- Renova also holds a 33.19% stake in Swiss pump maker Sulzer (OTC:SULZF), which said earlier this week it was in talks with the U.S. company about a potential deal.
- A new report says Siemens (OTCPK:SIEGY) is preparing a $6B-plus offer for DRC.
- Meanwhile, DRC is downgraded to Sell at Gabelli, which says shares have run up too far on the M&A talk; also, a potential antitrust review, while likely not an obstacle, could mean a deal close would be 6-9 months out.
Sep. 18, 2014, 9:12 AM
- Dresser-Rand (NYSE:DRC) +1.5% premarket after William Blair says the company could be valued at $80-$100/share in an M&A deal with limited downside.
- Blair cites an increasing likelihood of a merger transaction after Sulzer confirmed yesterday that it is in talks to acquire DRC; the firm keeps its Outperform rating on the stock while raising its price target to $82 from $70.
- Meanwhile, Gabelli continues to believe DRC has an asking price somewhere above $80 to be acquired by Siemens (OTCPK:SIEGY).
Aug. 7, 2014, 4:12 PM
- Dresser-Rand (DRC +8.6%) spiked into close following a Bloomberg report that it hired Morgan Stanley to prepare for possible takeover bids from companies including Siemens (OTCPK:SIEGY).
- While DRC isn’t actively pursuing a sale, the company is said to have retained Stanley after potential suitors expressed interest; the report says CEO Vincent Volpe Jr. may not even want a sale and is seeking defense advice from the banker.
- Siemens reportedly has been evaluating a bid for DRC since at least 2011; analysts also have mentioned GE, Cameron International (NYSE:CAM) and National Oilwell Varco (NYSE:NOV) as potential buyers in the past.
Jul. 17, 2014, 3:58 PM
- Dresser-Rand (DRC +12.5%) maintains strong gains following a report overnight that Siemens (OTCPK:SIEGY -1.9%) is preparing an offer to buy out the oilfield equipment maker and has opened up talks following its unsuccessful bid to buy Alstom’s energy assets earlier this year.
- Siemens has “huge” firepower to pursue deals toward expanding its energy assets, CEO Joe Kaeser had said after coming up short on Alstom.
- “Strategically it would be a good fit, it would fill some gaps in the portfolio and improve Siemens's position in North America,” Commerzbank analysts say.
- Shares have held up despite some notes of caution throughout the day; DRC s not viewed as a “motivated” seller now, a J.P. Morgan analyst says, and Raymond James believes a takeover is unlikely.
Jun. 20, 2014, 11:45 AM
- The Alstom (ALSMY) board will be convened no later than Monday to review and resolve the updated offer from GE as well as the newest proposal from Siemens (SIEGY) and Mitsubishi Heavy Industries (MHVYF).
- Previously: Siemens, Mitsubishi update Alstom bid
- Previously: CNBC: GE revised proposal creates three joint ventures
May 7, 2014, 9:15 AM
- Siemens (SI) +2.2% premarket after reporting what it calls a "mixed" FQ2 earnings performance, as net profit rose 11% Y/Y to €1.12B ($1.6B), citing its efficiency program and higher earnings from its infrastructure, health care and manufacturing equipment divisions.
- But new orders fell 13% to €18.43B vs. the year-ago period which was boosted by large wind turbine and train contracts.
- Revenues fell 1.9% because of unfavorable exchange rates and a lower volume of large orders.
- Reaffirms FY 2014 guidance for an EPS increase of at least 15% from €5.08 last year and revenues of at least at FY 2013 levels (€75.9B).
- Results "showed that we still have a lot to do to improve our operating performance," CEO Joe Kaeser says, and he's hoping the sweeping restructuring announced yesterday will do the job.
Siemens AG is engaged in electronics and electrical engineering. The Company operates in sectors such as Industry, Energy and Healthcare.
Industry: Telecom Services - Foreign
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