Stadler Rail Shares Jump 21% on Strong Earnings, but Trust Needs Rebuilding

Stadler Rail's shareholders are celebrating a 21% surge in the company's stock price following strong first-half financial results. The rail vehicle manufacturer saw order intake climb by 60% and revenue increase by 40%, significantly surpassing market expectations and marking a notable improvement in profitability.

The company's Ebit margin rose to 4%, a welcome development after years of financial disappointments. Management attributed past struggles to external factors like pandemic-related supply chain disruptions and the war in Ukraine. However, the article notes that Stadler also made internal errors, accepting unprofitable contracts that boosted market share but hurt profits.

Under CEO Markus Bernsteiner, who took the helm in early 2023, Stadler appears to be adopting a more cautious approach to new contracts. The company is increasingly focusing on profitable services alongside rolling stock orders. The article highlights a past issue where clients tried to include non-technical tasks, such as graffiti removal, in maintenance contracts, which Stadler is now scrutinizing more closely.