Siemens Energy's Wind Unit Finally Turns Profitable as Order Book Hits €162 Billion

Siemens Energy posts record orders and raises guidance as wind unit swings to profit, fueling breakup speculation.

The turnaround story at Siemens Energy has been building for quarters, but the numbers delivered on Wednesday finally gave investors the proof they had been waiting for. The Munich-based group posted a 70.5 percent jump in net profit to €1.188 billion for the third quarter of fiscal 2026, while revenue climbed 18.5 percent to €11.4 billion on a comparable basis. Perhaps more significantly, the wind turbine subsidiary Siemens Gamesa — long the company's most painful problem child — swung to a quarterly profit for the first time since 2022.

The Gamesa recovery is the headline act. The division posted earnings of €56 million for the quarter, a dramatic reversal from the €425 million loss it recorded in the same period a year earlier. Management remains committed to reaching breakeven for the full year 2026, a milestone that would close the book on years of writedowns and red ink that weighed heavily on the parent company's valuation.

Record Order Intake Points to Sustained Momentum

The operational strength extends well beyond the wind business. Order intake hit a record €17.9 billion in the quarter, up from €16.6 billion a year earlier, pushing the total order backlog to an unprecedented €162 billion. The result before special items nearly tripled to €1.623 billion, underscoring that profitability is now growing in step with the top line.

Demand is being driven by large-scale infrastructure projects. Transmission system operator 50Hertz awarded a consortium comprising Siemens Energy, Neptun Werft and Smulders a contract for the 2-gigawatt "North Sea Connector 2" converter platform last Friday. Spanish developer Reolum also placed an order for an SST-800 steam turbine for the "La Robla Green" biomass project. The appetite for grid technology is such that Siemens Energy announced plans to create 10,000 new jobs worldwide.

Board Meeting Fuels Breakup Speculation

Adding to the narrative is a Reuters report that the supervisory board has scheduled a special meeting for August 25 to discuss a potential spin-off of the "Transformation of Industry" division. Nothing has been confirmed, but the prospect of a slimmer portfolio — one that would give the grid technology and resurgent wind businesses greater visibility on the capital markets — has reignited debate about the group's future structure. Investors appear to be pricing in the possibility, even as they weigh the uncertainty that any major corporate restructuring brings.

Guidance Raised as Analysts Line Up Behind the Stock

The strong quarter prompted management to sharpen its full-year outlook. The margin before special items is now expected to land at the upper end of the previously guided 10 to 12 percent range, with net income projected at roughly €4 billion for the year. That upgrade reflects the growing contribution from both the gas turbine franchise and the wind division.

The analyst community responded with a wave of endorsements. Berenberg's Richard Dawson reiterated a "Buy" rating with a €205 price target, noting that gas turbine order intake came in 6.4 percent above consensus. Bernstein's Alasdair Leslie maintained an "Outperform" rating and €210 target, citing strong profitability and the gas power segment's order pipeline. RBC Capital Markets also reaffirmed its "Outperform" stance immediately after the release. JPMorgan holds an "Overweight" rating with a €235 target — the highest on the street — while Deutsche Bank sits at €200. The cluster of targets, ranging from €200 to €235, sits comfortably above the current share price.

Shares Drift Despite the Good News

The market reaction on Wednesday was muted, with the stock trading at €153.60, up 0.33 percent in the secondary article's account, though the primary source reported a slight decline of 1.33 percent. Either way, the moves are modest relative to the scale of the beat. Over the past seven trading sessions, the shares have gained 15.11 percent, suggesting much of the optimism had already been priced in ahead of the report. The stock remains 21.45 percent below its 52-week high of €195.54, reached in April — a gap that some analysts see as room for further upside, while others point to the upcoming supervisory board meeting as a source of overhang.

Adding to the mix, the shares have been tradable on the US OTCQX marketplace under the tickers "SMERY" and "SMEGF" since the start of August, a move designed to broaden access for American investors. And on Thursday, parent company Siemens AG — which holds a majority stake — reports its own quarterly figures. Comments on energy infrastructure demand from the parent could well move the needle for Siemens Energy as well.

For now, the central question is whether the market will reward the operational turnaround with a return toward the highs, or whether the prospect of a corporate restructuring keeps a lid on the valuation. Wednesday's numbers make the bull case easier to argue — but the board's August 25 meeting will likely determine how quickly that argument gains traction.