Siemens Energy is finally making headway on its most troublesome front. The operating loss at its wind turbine subsidiary Siemens Gamesa shrank to just €44 million in the second quarter, a dramatic improvement from the €249 million shortfall recorded a year earlier. The narrowing deficit signals that the turnaround at the struggling division is gaining traction, even as the broader group benefits from a surge in grid infrastructure demand.
The wind unit’s first-half loss also contracted sharply from last year’s level. Management now expects Gamesa to deliver comparable revenue growth of 3% to 5% in fiscal 2025, up from an earlier, lower forecast. The self-imposed target of breaking even on an adjusted margin basis remains intact—a critical milestone tied to the group’s overall profit guidance, with the offshore business seen as the main driver of the recovery.
Grid and gas turbines power a €17.75 billion order quarter
While Gamesa drags less on the bottom line, Siemens Energy’s Grid Technologies division is firing on all cylinders. Group order intake jumped to €17.75 billion in the quarter, comfortably beating the consensus estimate of €15.6 billion. Grid Technologies alone saw a 41% surge in orders, fueled by rising electricity demand from data centres and grid modernisation, particularly in the United States. Gas turbines also contributed to the strong performance.
The cumulative effect pushed the order backlog to a record €154 billion. Chief Financial Officer Maria Ferraro noted that substantial portions of the business are now booked out until 2030 and beyond, with the artificial intelligence boom expected to sustain demand well into the next decade.
Profit leaps, guidance raised, cash pile swells
Net profit after tax came in at €835 million for the quarter, providing the firepower for a significant upgrade to the full-year outlook. Siemens Energy now forecasts free cash flow before taxes of around €8 billion—nearly double the previous estimate. Revenue growth is seen accelerating to a range of 14% to 16%, up from earlier projections.
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To handle the flood of orders, the group is expanding production capacity. A joint project with partner Končar in Jankomir, Croatia, will see roughly €260 million invested in a transformer factory to secure supply of critical grid components.
Shareholder returns ramped up to €3.6 billion
The stronger cash generation has given management room to boost capital returns. Siemens Energy plans to buy back up to €3 billion of its own shares in the current fiscal year, an increase of €1 billion from the original €2 billion programme. Combined with the dividend already paid in March, total shareholder distributions for the year could reach as high as €3.6 billion. The company had previously signalled buybacks of up to €6 billion through 2028.
Market shrugs, but year-to-date gains remain hefty
Despite the upbeat news, the stock failed to ignite fresh buying. Shares traded at €169.96 on Tuesday, down 4.5% on the day. The subdued reaction reflects how much good news was already priced in after a blistering rally that has left the stock up 38.4% since the start of 2025 and more than 131% over the past twelve months.
Bernstein Research reiterated an “Outperform” rating with a €150 price target on Tuesday. Analyst Alasdair Leslie praised the expanded buyback and the strong order momentum in a first reaction note. For the next leg higher, investors will be watching whether Gamesa can finally reach breakeven and whether Grid Technologies maintains its torrid pace.
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