Siemens Stock Falls Despite Record Profits – Here’s Why

TLDR

• Siemens reported record net income of €10.4 billion, up 16%, and all-time high free cash flow of €10.8 billion for 2025.
• The stock fell over 5% after Q4 earnings missed group-level forecasts due to higher central costs and a weaker 2026 outlook.
• Digital Industries division showed strong performance with 29% organic order growth versus 15.4% expected.
• The company guided 2026 EPS of €10.40 to €11, below consensus of €11.54, citing currency headwinds and acquisition integration costs.
• Siemens plans to reduce its Siemens Healthineers stake from 67% to 37% and raised its dividend to €5.35 per share.

Siemens delivered record financial results for 2025 while simultaneously disappointing investors with its forward guidance. The German industrial group reported net income of €10.4 billion, a 16% increase from the prior year.

Free cash flow hit an all-time high of €10.8 billion. Fourth-quarter cash flow alone reached €5.3 billion, the highest quarterly figure in company history.

Despite these records, shares dropped over 5% on Thursday. The market reaction centered on earnings that missed group-level expectations and a cautious 2026 outlook.

Total revenue for the year reached €78.9 billion with orders of €88.4 billion. Both figures grew in the mid-single-digit range on a comparable basis. The company raised its dividend to €5.35 per share from €5.20.

Acquisition Costs Weigh on Margins

Fourth-quarter group orders declined 1% on a comparable basis. Analysts had expected a 0.8% gain instead.

The shortfall in group-level earnings came from higher central and finance costs. The $10.6 billion Altair acquisition and $5.1 billion Dotmatics purchase both contributed to the expense burden.

Adjusted profit missed consensus forecasts by 19% when excluding acquisition effects. Higher severance expenses also pressured margins during the quarter.

The book-to-bill ratio stood at 1.02x for the quarter. Industrial free cash flow of €5.3 billion beat the €4.2 billion consensus estimate.

Digital Industries Shines While Other Units Lag

Digital Industries emerged as the clear standout. The division posted 29% organic order growth against expectations of 15.4%.

Sales grew 9% organically, beating the 7.5% forecast. Margins came in 160 basis points above analyst estimates.

Strong demand for automation systems and software drove the performance. Growth in China contributed to the division’s results.

Smart Infrastructure reported higher revenue across most regions. The business showed steady performance but lacked the growth punch of Digital Industries.

Mobility saw softer results. The division faced tough comparisons after an unusually high volume of train and rail orders the previous year.

Full-year earnings per share excluding purchase price allocation came in at €10.71. This figure landed within the company’s guidance range of €10.40 to €11.

Currency Effects Dampen 2026 Expectations

Siemens guided for 2026 revenue growth between 6% and 9% on a comparable basis. Consensus had expected 6.5% growth.

The company expects EPS before purchase price allocation between €10.40 and €11. This range sits well below the consensus estimate of €11.54.

The midpoint implies a 4% year-over-year increase. It represents a 7% downside to what analysts had forecast.

Currency effects will create a 70 to 80 cent headwind on earnings. Integration costs from Dotmatics and Altair will continue to pressure results.

By division, Digital Industries should see revenue growth of 5% to 10% with margins between 15% and 19%. Smart Infrastructure is projected to grow 6% to 9% with margins of 18% to 19%.

Mobility expects growth of 8% to 10% with margins in the 8% to 10% range. The book-to-bill ratio should remain above 1x across the group.

CEO Roland Busch called 2025 a “milestone year” for the company. He pointed to progress in the shift toward software and AI as key achievements.

The company raised its midterm guidance to 6% to 9% organic growth from 5% to 8%. Siemens aims to double its digital revenue by 2030, implying roughly 15% annual growth.

Siemens announced plans to reduce its Siemens Healthineers stake from 67% to 37%. The medical technology unit will be deconsolidated as part of the company’s focus on software and AI.

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