Siemens Energy has raised its annual forecast following a stronger-than-expected performance in the second quarter of the fiscal year 2024/2025. The Munich-based company reported an order intake of 14.43 billion euros, a significant increase from 9.47 billion euros in the same quarter last year. This surge in orders reflects a robust demand for its products, particularly in the gas and grid technology sectors.
Revenues also saw a notable rise, climbing to 9.96 billion euros, which represents a 20.7 percent increase compared to the previous year. Siemens Energy's earnings before special items skyrocketed from 170 million euros to 906 million euros, achieving a margin of 9.1 percent. Free cash flow before taxes reached 1.39 billion euros, a substantial jump from 483 million euros in the same quarter last year.
The company's Gas Services segment reported an impressive order intake of 7.04 billion euros, while its Grid Technologies division brought in 5.21 billion euros, both contributing to the overall positive financial outlook. The operating margin for Gas Services rose to 16.1 percent, and Grid Technologies achieved an impressive 19.9 percent margin. In contrast, the Transformation of Industry segment maintained a stable order intake of 1.56 billion euros, with an operating margin of 11.0 percent and a free cash flow of 145 million euros.
Despite the challenges faced by Siemens Gamesa, the company's wind turbine subsidiary, it managed to reduce its losses, reporting a negative result of 249 million euros, which improved its margin to minus 9.2 percent. Nevertheless, Siemens Energy remains optimistic about its financial prospects, now forecasting a free cash flow of around 4 billion euros and an after-tax profit of up to 1 billion euros for the fiscal year 2025.
On Thursday, April 17, 2025, Siemens Energy's stock experienced a significant surge, nearing its record high of 64.56 euros set in February. The stock's rise was fueled by the strong quarterly results, with adjusted profit before special items jumping to 906 million euros, surpassing analysts' expectations of 577 million euros, as reported by Bloomberg. The revenue growth of more than one-fifth to 9.96 billion euros and a staggering 52.3 percent increase in orders to 14.43 billion euros further bolstered investor confidence.
Free cash flow before taxes nearly tripled to 1.39 billion euros, driven by the company's gas turbines and grid technologies divisions. Analysts noted that the growth trajectory was particularly impressive given the ongoing challenges faced by Siemens Gamesa. Despite this, the company has made progress, and its improved performance has been a positive sign for investors.
Siemens Energy's optimistic outlook has led to an upward revision of its revenue growth expectations for the fiscal year. The company now anticipates a revenue increase of 13 to 15 percent, up from the previous forecast of 8 to 10 percent. Furthermore, the adjusted profit margin is now expected to fall between four and six percent, compared to the earlier prediction of three to five percent.
As the company continues to navigate the complexities of the energy market, it remains confident in its ability to deliver strong results. The recent performance has not only showcased Siemens Energy's resilience but also its capacity to adapt to changing market conditions.
In light of these developments, analysts have expressed optimism about the company's future. JPMorgan analyst Akash Gupta highlighted the significant growth in the gas technology business, noting that the new business segment achieved a quarterly record in the history of Siemens Energy. The company's ability to exceed consensus estimates for revenue, particularly in the wind sector, has further solidified its standing in the market.
Looking ahead, Siemens Energy is set to present its final figures for the quarter on May 8, 2025, where it is expected to provide more insights into its financial performance and update its mid-term targets. The company has indicated that it will likely revise its forecasts for nearly all segments, with a particular focus on the gas technology business, which is expected to outperform initial expectations.
Despite the challenges faced in the wind sector, Siemens Gamesa has shown signs of recovery, with sales increasing by 16.2 percent to 2.7 billion euros. The subsidiary has made strides in limiting its losses, which stood at 249 million euros before special items. This improvement is seen as a positive step toward stabilizing the company's overall performance.
As Siemens Energy continues to build on its strong foundation, it is poised for sustained growth in the coming years. The company's proactive approach to adjusting its forecasts in response to market demands demonstrates its commitment to maintaining a leadership position in the energy technology sector.
In summary, Siemens Energy's impressive second-quarter results have sparked optimism among investors, leading to a significant increase in stock prices and a positive revision of financial forecasts. With a strong order intake and revenue growth, the company is well-positioned to navigate the challenges ahead while capitalizing on emerging opportunities in the energy market.
