Back to top

Image: Bigstock

Siemens Optimizes Its Portfolio With Sale of Innomotics to KPS

Read MoreHide Full Article

Siemens Aktiengesellschaft (SIEGY - Free Report) announced that it closed the previously announced sale of Innomotics to KPS Capital Partners. This move marks a step toward optimizing SEIGY’s portfolio.

Siemens’ Strategic Transaction With KPS

On May 16, 2024, SIEGY inked a deal with KPS to sell its Innomotics business for €3.5 billion ($3.85 billion). 

Siemens decided in November 2022 to consolidate its significant drive and electric motor companies under one roof and operate them independently outside of Siemens's core business. This implementation of the Innomotics sale is a step forward in that goal.

The sale brought clarity to Innomotics' customers and employees, paving the way for extensive growth opportunities. With a high growth potential driven by sustainability-oriented demand for efficient electrification, Innomotics is well-positioned to continue its success with KPS.

Siemens and its shareholders will gain from a focus on integrating the real and digital worlds.

SIEGY’s Focus on Expanding Core Product Offerings

In September 2024, the company announced that it inked a deal to acquire Trayer Engineering, a medium-voltage secondary distribution switchgear specialist based in the United States. This move aligns with SIEGY’s strategy of expanding its grid modernization product offering. Siemens' digital solutions enhance Trayer's robust offerings. The Siemens Xcelerator portfolio, including Electrification X, complements Trayer's solutions. This combination enables utilities and municipalities to upgrade their distribution grids. It also drives grid efficiency in outdoor and underground applications.

SIEGY also announced that Siemens Smart Infrastructure and E.ON Drive Infrastructure signed a global framework agreement to improve Europe's electric vehicle charging infrastructure. The partnership will provide Siemens with access to the web-based backend service Sifinity Control and DC charging stations.

This collaboration is expected to make a substantial contribution to Europe's e-mobility growth by offering a seamless and efficient charging experience for millions of electric vehicle users.

Siemens’ Q3 Top Line Declines Y/Y

SIEGY’s third-quarter fiscal 2024 earnings were $1.35 per share, whereas it reported $2.37 in the second quarter of fiscal 2023. 

Siemens posted revenues of $20.3 billion for the quarter ended June 2024, missing the Zacks Consensus Estimate of $21.5 billion. This compares to year-ago revenues of $21.1 billion million.

SIEGY’s Share Price Outperforms Industry

The company’s shares have gained 43.8% in the past year compared with the industry’s 13.6% growth.

 

Zacks Investment Research
Image Source: Zacks Investment Research

 

Siemens’ Zacks Rank & Stocks to Consider

SIEGY currently carries a Zacks Rank #3 (Hold).

Some better-ranked stocks from the Industrial Products sector are Crane Company (CR - Free Report) , Flowserve Corporation (FLS - Free Report) and RBC Bearings Incorporated (RBC - Free Report) . These three companies have a Zacks Rank #2 (Buy) at present. You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.

The Zacks Consensus Estimate for Crane’s 2024 earnings is pegged at $5.07 per share. The consensus estimate for 2024 earnings has moved north by 6% in the past 60 days. The company has a trailing four-quarter average earnings surprise of 11.2%. CR shares have gained 75.2% in a year.

Flowserve has an average trailing four-quarter earnings surprise of 18.2%. The Zacks Consensus Estimate for FLS’s 2024 earnings is pinned at $2.76 per share, which indicates year-over-year growth of 31.6%. The consensus estimate for 2024 earnings has moved north by 4% in the past 60 days. The company’s shares have gained 27.5% in a year.

The Zacks Consensus Estimate for RBC Bearings’ fiscal 2025 earnings is pegged at $9.71 per share. The consensus estimate for 2025 earnings has moved north by 1.4% in the past 60 days. The company has a trailing four-quarter average earnings surprise of 4.7%. RBC shares have gained 27.2% in a year.

Published in