Siemens Energy is facing a $2.2 billion hit to its profits as its clean energy division, Siemens Gamesa, struggles with an order production backlog and quality control issues surrounding its wind turbines.

In June, Siemens Energy scrapped its profit forecast. In a move that sent its stock price tumbling – at time of writing the company’s stock shows a four per cent decline – it warned that costly failures at wind turbine subsidiary Siemens Gamesa could drag on for years, sending shares tumbling.

“The quality problems really result from the past, but I think we have too fast rolled out platforms into the market,” Siemens chief exec Christian Bruch told CNBC’s ‘Squawk Box Europe’ on Monday.

He continued: “That is not a cost issue per se, that is really a quality issue in terms of going too fast with new products into the market, noting that the other steps on the company’s mind was to “stabilise the business in terms of ramping up new factories”.

Deutsche Bank today reiterated its ‘hold’ rating on Siemens Energy stock, noting that commercial dynamics remained strong.

“Operationally, all divisions performed well, with the exception of Gamesa,” said Gael De Bray, Deutsche Bank European head of capital goods. “Gas Services beat on revenue and profit by 5 per cent and 25 per cent, respectively, with a solid margin of 10.9 per cent, 170 [basis points] above consensus.”

Share Story: