Siemens Energy Lifts Guidance After Blockbuster Quarter, But a Revenue Miss and Dollar Weakness Check the Rally

Siemens Energy posts record order intake boosting backlog to €154B, but revenue miss and weak US dollar pull stock 9% off highs. Profit and cash flow outlook raised.

The spring quarter delivered a tale of two numbers for Siemens Energy. On one side stood a record order intake that catapulted the group’s backlog to €154 billion — a figure that would make most industrial companies envious. On the other side, a revenue shortfall and a slumping US dollar prompted investors to take some profits off the table, sending the stock down from its recent highs. The shares, which have surged roughly 39% since the start of the year, now trade at around €171, about 9% below the all-time peak set in April.

Orders for the period reached €17.75 billion, comfortably beating the analyst consensus of €15.64 billion. The book-to-bill ratio — a measure of how much new business is coming in relative to revenue — stood at 1.72 for the whole group. The engine room was North America, where order intake more than doubled year-on-year, fuelled by the global build-out of artificial intelligence infrastructure. Data centres, in particular, are demanding ever more efficient energy solutions, and Siemens Energy’s gas-services division hit a record order intake as a result. The segment’s own order backlog swelled to €66 billion, with a book-to-bill of 2.55.

Grid Technologies, the group’s network-equipment arm, proved to be an even bigger growth driver. Its order intake jumped 41.5% to €7 billion, lifted by a major high-voltage direct-current (HVDC) project in the Baltic Sea worth more than €1 billion and rising transformer demand from the United States. The unit’s backlog now stands at €49 billion, and it booked nearly €2 billion in data-centre orders in the first half alone. Chief Executive Christian Bruch expects transformer and switchgear capacity to increase by roughly 50% by 2030 to keep pace with this demand.

The strong order flow translated into improved profitability. Net profit for the quarter was €835 million, up sharply from €501 million a year earlier, translating into earnings per share of €0.89. Free cash flow before taxes reached €2 billion in the quarter — and €4.8 billion for the first half — buoyed by hefty customer advance payments, especially in the gas and grid businesses. That cash generation prompted management to lift its full-year free-cash-flow outlook to around €8 billion, a major upgrade from the previous range of €4 to €5 billion.

Still, the top line failed to live up to market expectations. Comparable revenue rose 8.9% to €10.29 billion, missing the consensus estimate of €10.84 billion. Currency headwinds, notably a weaker US dollar, shaved around 550 basis points off the growth rate. Chief Financial Officer Maria Ferraro noted that the order book already covers roughly 93% of the second half of fiscal 2026, with nearly 80% of fiscal 2027 also under contract.

The wind-power division, Siemens Gamesa, continues to lag behind the rest of the group. Revenue inched up by at most 5%, and the subsidiary is still only targeting breakeven on its earnings before special items for the full year. By contrast, Grid Technologies alone is now expected to deliver revenue growth of 25% to 27% for the current fiscal year, with a margin of 18% to 20%.

For the group as a whole, the guidance has been raised significantly. Comparable revenue growth is now seen at 14% to 16%, up from the earlier 11% to 13%, and the earnings margin before special items is forecast at 10% to 12%. Net profit is pegged at about €4 billion. RBC Capital Markets analyst Colin Moody, who rates the stock “outperform” with a €200 target price, said the figures fully confirm the strong operational momentum. New medium-term targets for 2030 are scheduled for release alongside the full-year results in November.