Siemens Energy's (ETR:ENR) Profits Could Be Just the Beginning
Siemens Energy's Financial Performance: Siemens Energy AG reported strong earnings with a significant free cash flow of €4.1 billion, which exceeded its statutory profit of €1.41 billion, indicating good quality earnings.
Accrual Ratio Insights: The company recorded a negative accrual ratio of -0.51, suggesting that its profits are well-supported by cash flow, although a high accrual ratio can indicate potential issues with future profitability.
Share Dilution Impact: Siemens Energy issued 9.0% more shares over the past year, which has diluted earnings per share (EPS) growth, despite a 19% increase in profit, highlighting the importance of considering EPS for shareholder returns.
Future Profitability Considerations: While Siemens Energy's profit results are promising, the dilution of shares means that shareholders should focus on EPS growth to gauge the company's true profitability and potential for share price appreciation.
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