What Siemens (XTRA:SIE)'s Rising Sales and Falling Profits Mean for Shareholders

• Siemens reported fourth-quarter earnings for the period ended September 30, 2025, with sales rising to €21.43 billion while net income declined to €1.62 billion compared to the previous year.
• While quarterly sales increased, the decline in net income and earnings per share highlights ongoing margin pressures despite revenue growth in Siemens' core businesses.
• We'll explore how these results, particularly the mix of stronger sales and lower profitability, impact Siemens' medium-term investment outlook and margin improvement narrative.

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Siemens Investment Narrative Recap

To own Siemens stock, you need to believe in its long-term ability to translate robust demand for electrification and industrial software into consistent revenue and margin growth, even as macroeconomic headwinds and competition persist. This quarter's stronger sales but lower net income call attention to ongoing margin pressures rather than shifting the biggest near-term catalyst, accelerating digital transformation, or the main risk, which remains weak demand in Digital Industries and volatile large project order flow.

Among the recent announcements, Siemens’ expanded partnership with Capgemini to co-develop AI-native digital solutions stands out, especially as investors focus on the company’s efforts to drive recurring, high-margin digital revenues. The success of these digital initiatives is directly relevant to the ongoing challenge of offsetting margin headwinds and solidifying Siemens’ long-term growth narrative.

By contrast, investors should recognize that persistent weakness in core Digital Industries demand could ...

Read the full narrative on Siemens (it's free!)

Siemens' outlook forecasts €93.6 billion in revenue and €10.5 billion in earnings by 2028. This scenario assumes a 6.1% annual revenue growth rate and a €2.6 billion increase in earnings from the current €7.9 billion.

Uncover how Siemens' forecasts yield a €252.03 fair value, in line with its current price.

Exploring Other Perspectives

Simply Wall St Community members provided 9 fair value estimates for Siemens ranging from €208.46 to €299.16 per share. While expectations for digital revenue growth remain a catalyst, opinions differ widely and invite you to weigh several viewpoints yourself.

Explore 9 other fair value estimates on Siemens - why the stock might be worth 17% less than the current price!

Build Your Own Siemens Narrative

Disagree with existing narratives? Create your own in under 3 minutes - extraordinary investment returns rarely come from following the herd.

• A great starting point for your Siemens research is our analysis highlighting 3 key rewards and 1 important warning sign that could impact your investment decision.
• Our free Siemens research report provides a comprehensive fundamental analysis summarized in a single visual - the Snowflake - making it easy to evaluate Siemens' overall financial health at a glance.

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This article by Simply Wall St is general in nature. We provide commentary based on historical data and analyst forecasts only using an unbiased methodology and our articles are not intended to be financial advice. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. We aim to bring you long-term focused analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material. Simply Wall St has no position in any stocks mentioned.

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