Siemens AG and Siemens Energy post record quarterly profits on AI-driven data center demand

Siemens AG posts record quarter

Siemens AG reported its highest-ever quarterly industrial profit of €3.52 billion for the three months ended June 30, a 25% increase from €2.82 billion a year earlier and ahead of analyst forecasts of €3.18 billion. Revenue grew 7% to €20.79 billion, beating consensus estimates of €20.64 billion, while orders climbed 13% to €27.90 billion, also a quarterly record. Net profit after taxes reached €2.58 billion, up roughly 16% year-on-year. The Munich-based group raised its full-year earnings per share guidance to a range of €11.20 to €11.50, up from €10.70 to €11.10, and continues to expect revenue growth of 6% to 8% on a comparable basis for the fiscal year ending September 30.

CEO Roland Busch said the company had completed another very successful quarter and was raising its outlook.

We have completed another very successful quarter. We are on track for another successful fiscal year and are raising our outlook.

Segment performance

The Digital Industries factory automation unit, which had been comparatively weaker, saw profit jump 44% to €923 million on revenue growth of 10% to €4.9 billion. Software revenue within the division rose 15% to €1.8 billion, and the operating margin reached 18.7%. Smart Infrastructure remained the largest contributor, with profit of €1.27 billion, up 19%, driven by a data center construction boom that lifted revenue 13% to €6.4 billion and orders 42% to €8 billion. The Mobility rail division earned €280 million, marginally below the prior-year figure. US competitor Rockwell Automation, which Siemens monitors closely, reported revenue growth of $2.3 billion and operating profit up 23% to $516 million with a margin of 22.3% for the same quarter.

Busch told Handelsblatt that Siemens was restructuring from a position of strength.

We are clearly acting from a position of strength. One should change when things are going well, not wait until they get worse.

Healthineers spinoff advances

CFO Veronika Bienert said the company had resolved relevant tax issues with financial authorities to proceed with the planned spinoff of its two-thirds stake in Siemens Healthineers. The conglomerate intends to roughly halve that stake by distributing shares to its own shareholders. Siemens also benefited from US tariff refunds related to Healthineers.

As expected, we have in the meantime conclusively clarified the relevant tax issues with the financial authorities in order to proceed as planned with the spinoff of Siemens Healthineers.

Siemens Energy hits record levels

Siemens Energy, the separately listed former subsidiary, reported its own record quarter on August 5. Revenue rose 18% to €11.5 billion, orders increased 8.5% to €17.9 billion, and operating profit nearly tripled to €1.623 billion from €497 million a year earlier, yielding a margin of 13.7%. The gas turbine division posted record orders of nearly €10 billion, up 62%, with a margin of 17.2%, driven by US data center demand and power plant projects in the Middle East and Asia. The grid business achieved double-digit growth across orders, revenue, and profit, with a margin of 19.8%. The company's order backlog stood at €162 billion.

CEO Christian Bruch said global electricity demand remained strong.

Global demand for electricity, and consequently for our products, remained strong in the third quarter.

Wind unit and rebranding

Siemens Gamesa, the wind division that had accumulated billions in losses since 2023 due to quality defects in two onshore platforms, returned to profit for the first time in 15 quarters with €75 million in operating profit and a margin of 2.7%. CFO Maria Ferraro called the result a milestone for the group. However, cash flow remained negative at minus €1.7 billion for the first nine months of the fiscal year, as revenue is recognized based on construction progress regardless of cash collection. Wind chief Vinod Philip said in early June he was confident about reaching break-even by the end of the fiscal year.

Siemens Energy also announced it will rename itself Omterra later this year, combining "Om" (referencing the Greek letter Omega and its association with electrical resistance) with "Terra" (earth). Bruch indicated the company is reviewing its portfolio, including the long-term place of the wind business within the group, but said no hasty decisions would be made.