Siemens Energy Posts €835 Million Quarterly Profit, Doubles Cash Flow Target as AI and Grid Expansion Fuel Record Orders

The turnaround at Siemens Energy is gathering pace. The industrial group reported a net profit of €835 million for its fiscal second quarter, underpinned by a surge in orders that pushed the backlog to a record €154 billion. Chief executive Christian Bruch pointed to the rapid buildout of AI data centers as a key driver, noting that roughly one in every four gas turbines sold now goes to power such facilities.

The order intake of €17.7 billion during the three-month period marked a 30% year-on-year jump. The pipeline for Grid Technologies looks especially strong, with the division expected to deliver revenue growth of 25% to 27% and an operating margin of 18% to 20%. To keep up with demand, Siemens Energy is investing €260 million to expand a transformer plant in Jankomir, Croatia, in a joint venture with local partner Končar.

Management has responded to the momentum by substantially raising its full-year guidance. Free cash flow before taxes is now seen at roughly €8 billion, nearly double the previous forecast of €4 billion to €5 billion. The net profit outlook for fiscal 2026 has been lifted to around €4 billion, from the earlier range of €3 billion to €4 billion. Comparable revenue growth is expected to land between 14% and 16%, with an operating margin of 10% to 12%.

Shareholders are set to benefit directly from the cash influx. The company is accelerating its ongoing share buyback program by up to €1 billion, bringing total potential distributions for the 2025/26 period to as much as €3.6 billion. The decision comes as cash generation accelerates, aided by the improving performance of the long-troubled wind turbine subsidiary Siemens Gamesa.

Should investors sell immediately? Or is it worth buying Siemens Energy?

Gamesa’s operating loss narrowed sharply to €44 million in the second quarter, compared with a €249 million loss a year earlier. The unit is on track to reach break-even by the fourth quarter of the current fiscal year, a milestone that would remove a major drag on group earnings.

Analysts have taken note of the rapid operational improvement. RBC Capital Markets rates the stock “Outperform” with a €200 price target, citing the cash flow trajectory. Jefferies also has a “Buy” rating and a €164 target, while Bernstein Research reiterated “Outperform” with a €150 objective, praising the expanded buyback and strong order momentum.

Despite the torrent of positive news, shares slipped 3.9% on Tuesday to €170.96. The dip reflects profit-taking after a stellar run that has seen the stock more than double over the past 12 months, gaining roughly 131%. A slight miss on quarterly revenue expectations also tempered enthusiasm, underlining the high bar that Siemens Energy now faces with investors.