On Tuesday, wrote:
Traders speculating that lower prices and falling demand will harm profitability at Siemens AG (SIE)?s biggest business are betting against Europe?s largest engineering company before it reports earnings this week.
Bearish wagers on Siemens rose to the highest since June 2012 relative to bullish calls, according to data compiled by Bloomberg. The company expects lower margins at its energy operation, which contributes more than a third of revenue, in the next two to three years, according to a report last month.
Amid weakening economic growth, slowing European and Asian demand for Siemens?s flagship gas turbines is stoking concern about the profitability of the business. Investors awaiting guidance on 2015 earnings after this week?s results are concerned about the extent of the decline, according to Espirito Santo Investment Bank?s Nick Wilson.
?What happens to energy margins?? Wilson said by phone. ?There?s a feeling that perhaps energy itself is under demand pressure, particularly in Europe. The second debate is China. They will want to give some sort of color on what austerity measures in China are doing to their business.?
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