Siemens Energy shares rise despite a plunge in profit
Europe's green energy firm, Siemens Energy AG, reported a year-on-year plunge in profit during the fiscal first quarter of 2025, resulting in its shares falling more than 2% at the market open before rebounding and rising 0.8% in the first trading hour. The stock rallied 12% this year, boosted by a positive energy outlook following US President Donald Trump's announcement of a $500 billion (€481 billion) artificial intelligence investment last month.
Its net income was recorded at €252 million, only a fraction of last year's €1,582m, which led to earnings per share of €0.23, compared to €1.79 in the same quarter in fiscal year 2024. The downbeat earnings have been negatively impacted by a €374 million loss in Siemens Gamesa.
Despite this, the company emphasised that the division's loss was to a significantly lesser extent than in the prior-year quarter. The quarterly results were otherwise robust as CEO Christian Bruch commented: 'Our strong first quarter reflects the market opportunities arising from the increasing demand for electricity. The strong cash flow was mainly driven by growth across all our businesses, advance payments and timing effects. Our focus lies still on profitable topline growth and technological leadership.'
A record quarter order backlog
Siemens Energy AG reported orders amounted to €13.7 billion, with the exceptionally high order book in Grid Technologies and the Transformation of Industry leading to the record quarterly order backlog of €131 billion. The company's profit before special items recorded at €481 million, more than doubled the number of last year. Its overall revenue increased by 18.4% to €8.9 billion with all segments seeing growth.
A bright spot is that free cash flow pre-tax was recorded at €1,528 million, compared to negative €283 million in the same quarter last year, which was 'materially stronger than expected.' Management expects the company will exceed the current free cash flow pre-tax guidance of up to €1 billion.
However, the company provided guidance of comparable revenue growth of between 8% and 10% in fiscal year 2025, with a profit margin of between 3% and 5%. The outlook is narrowed from an up to 10% growth provided in November last year and was also far less positive than a high single-digit to low double-digit percentage revenue growth, with a profit margin of 10% to 1% by fiscal year 2028.
Trump's AI ambition to fuel electricity demands
Siemens Energy AG was formed through the spin-off of the former Gas and Power division of Siemens. The company's shares have soared more than 300% in the past year amid surging energy demand for building data centers amid the AI boom, particularly in the US.
The company's shares jumped to a record high following Trump's announcement to invest billions of dollars in developing the US AI infrastructure in late January. Board chair of Germany's renewable energy company, Kaeser expects a 'massive tailwind' from President Trump's power strategy. He said that increasing demand for data centers and the reliable energy capacity needed 'brought a boom to all energy companies,' adding that the next five to 10 years would be a very good time to be in the US market.
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