Siemens Energy Captures the Heart of the Market After Profitable Turnaround in FY2024
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Siemens Energy (SMNEY)'s stock has seen a remarkable rise of 317.48% year-to-date after successfully prove itself to be able to turn around its loss into profit in this fiscal year 2024.
That small-tiny green uptick on the right that represents profit brought an excitement into the market and stronger investor confidence.
The last time Siemens Energy recorded a profit was in 2018 and yeas after that, storms came in as after being spun off from its parent company Siemens AG, Siemens Energy inherited some loss-making businesses.
Siemens Energy is known to produce a wide range of energy from nuclear, renewables, gas turbines, hydrogen decarbonizing projects, and many more.
Then Covid-19 pandemic hit, disrupted supply chains and reduced demand. Challenges loomed afterward from the vast global energy market. With all the factors combined, in the fiscal year 2019/2020 the company must accept the fact they were in net loss of 1.9 billion compared to a profit of 282 million in fiscal year 2018.
The energy producer struggled for years and then thrived with strong order growth and met full-year expectations in 2024 with orders for the fourth quarter increase 42% to 15 billion. After the results, analysts stepped in upgrading their ratings giving positive assessments of Siemens Energy.
In its press release Siemens Energy said Global energy trends, like major grid investment and decarbonization, act as a catalyst for profitable growth across the entire Siemens Energy portfolio.
It is always interesting to see a company resurfaces and this is just the beginning, they still have Siemens Gamesa, another loss business as inheritance from the parent company. It is a wind energy business that still suffer, but with a clear path and action plan Siemens Energy believe they can turn it around to at least reach break-even financial position by fiscal year 2026.
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This article first appeared on GuruFocus.