Siemens Energy's Grid Boom Delivers a Record Quarter That Still Wasn't Enough for Investors

Grid Technologies drives record €17.75B orders and doubled cash flow forecast, but a weaker US dollar causes revenue to miss consensus, dampening shares.

Siemens Energy produced its best quarterly order intake on record and sharply raised its full-year cash flow forecast, yet the shares slipped when the numbers landed. The reason goes beyond profit-taking: a revenue miss that highlights the currency headwinds buffeting even the most buoyant industrial stories.

Revenue on a comparable basis rose 8.9% to €10.29 billion in the second quarter, falling short of the consensus estimate of €10.84 billion. A weaker US dollar sapped around 550 basis points from the top line. Still, that shortfall looks like a footnote when set against the rest of the numbers.

Order intake smashes expectations

The headline figure is the €17.75 billion in new orders booked during the period — roughly 13% above the analyst consensus of €15.64 billion. The book-to-bill ratio hit 1.72, and the total order backlog swelled to €154 billion. That war chest gives the company an extraordinary degree of visibility: CFO Maria Ferraro noted that roughly 93% of the second half of fiscal 2026 is already covered by orders on hand, and the coverage for fiscal 2027 stands just under 80%.

Driving those figures is Grid Technologies, the power transmission division that has become Siemens Energy's new profit center. Its order intake surged 41.5% year-on-year to €7 billion, helped by a high-voltage direct current project in the Baltic Sea worth more than €1 billion and rising transformer demand from the United States. In the first half alone, Grid Technologies booked close to €2 billion in data center orders. CEO Christian Bruch expects the company's transformer and switchgear capacity to increase about 50% by 2030.

Grid margins lift the entire group

The division's profitability is improving just as quickly as its revenue growth. Management now expects comparable sales growth of 25% to 27% for Grid Technologies in the current fiscal year, up from a previous forecast of roughly one-fifth. At the same time, the margin target before special items has been raised to 18% to 20% — a step change that underpins the company's evolving valuation narrative.

That progress is feeding through to the group level. Siemens Energy now guides for comparable revenue growth of 14% to 16% for the full year, compared with an earlier range of 11% to 13%. The group margin before special items is seen at 10% to 12%, and net profit is expected to land at around €4 billion, up from just over €3 billion previously.

Cash flow doubles — and then some

Perhaps the most striking upgrade came on free cash flow. The company reported €2 billion in free cash flow before taxes for the second quarter alone, pushing the first-half tally to €4.8 billion. For the full year, Siemens Energy now expects around €8 billion — far above the earlier forecast of €4 billion to €5 billion. The jump reflects strong customer prepayments, particularly from Gas Services and Grid Technologies.

Net profit for the quarter came in at €835 million, compared with €501 million a year earlier, while diluted earnings per share rose from €0.50 to €0.89. Group profit before special items climbed to €1.164 billion.

Gamesa’s drag continues to fade

The wind turbine business, Siemens Gamesa, remains a work in progress, but its negative impact is shrinking fast. Special items in the quarter amounted to just €55 million, a sharp improvement from the €291 million charge a year earlier. The division's underlying loss before special items narrowed to €44 million. Gamesa clearly has more healing to do, but it no longer dominates the narrative the way it did when it pushed the group into a restructuring scenario.

That shift in the story was underscored by the reinstatement of a dividend of €0.70 per share for the past fiscal year — the first payout after a prolonged hiatus.

The market’s short-term verdict

Despite all that, Siemens Energy shares closed at €171.34 on Tuesday, down 7.73% on the week. The stock has surged roughly 39% since the start of the year and sits about 9% below its all-time high set in April. The revenue miss and the strong run-up left little room for immediate enthusiasm.

But the underlying investment cycle remains intact. Aging power grids are being forced to absorb more renewable energy, data centers, and industrial electrification. Siemens Energy is positioned to benefit from that structural demand for years, not just quarters. In November, management is expected to unveil new medium-term targets for 2030 alongside the full-year results — a milestone that will likely sharpen the focus on just how much of this growth is already priced in.