Wärtsilä Earnings: Buoyant Conditions in Marine Persist, but Lumpy Energy Storage Orders Weigh

While marine demand conditions remain strong in late 2024, wide-moat Wärtsilä's order intake waned 3% sequentially in the third quarter as order intake for the energy division weakened substantially. Marine equipment orders rose 15% quarter on quarter, according with presently strong shipbuilding demand. On the other hand, energy storage equipment orders plummeted—falling some 77% sequentially and coming in well below Vara consensus expectations—with Wärtsilä citing a number of energy storage projects being deferred to later quarters, affecting demand for its battery energy storage systems, or BESS, in the quarter. Equipment demand for the energy segment was otherwise relatively resilient, up some 6% sequentially, with both baseload and balancing gas power plants orders relatively stable. Wärtsilä shares are some 15% lower in early trading, with investors likely concerned that the weakness in new orders is symptomatic of rising competition in BESS markets, as opposed to being entirely the result of lumpiness in order intake.