Wärtsilä beats estimates despite difficult political environment

The headline figure was a 20% beat on orders, driven in no small part by a recently inked deal to supply 15 large engines—totalling 282MW of capacity—to a yet-unnamed American datacentre customer. While the company remained tight-lipped on the precise financial contours of the agreement, market watchers have estimated the order to be worth somewhere in the region of €200–220 million, using Wärtsilä’s own back-of-envelope average of €0.75 million per MW for thermal power contracts.

This alone was enough to propel the group’s book-to-bill ratio to 1.27 times, a clear overshoot versus the 1.07x analysts had pencilled in, with thermal power orders trebling year-on-year to €613 million from a rather subdued €152 million in the same quarter last year.

Marine, the company’s traditional stronghold, more than held its own too—outperforming expectations by 8% and helping to round out a quarter in which revenues across the group’s three main divisions were broadly in line, but earnings saw a notable uplift thanks to the Energy segment. The company kept guidance steady, sticking to its narrative of an improving demand picture for Marine over the next year. Thermal, by contrast, is expected to tread water in demand terms, while Energy Storage—still a comparatively minor slice of the pie—was flagged for potential upside.

Investors, however, were reminded not to throw caution entirely to the wind. Management pointed to possible delays in order execution due to “the current political situation” and ongoing uncertainties surrounding tariffs—lingering risks that could prove disruptive in Wärtsilä’s key export markets. Nonetheless, the strength of the datacentre deal in particular may serve as a useful proof point for Wärtsilä’s adaptability in a shifting global energy landscape.

Not all brokerages were impressed however, with Barclays reiterating its sell recommendation. Its analyst, Vladimir Sergievskiy, has also lowered the price target from €11.50 to €11.00 which seems particularly bearish given its current share price of €21.22 (at time of writing). JP Morgan also maintains a sell rating on the stock with the slightly less pessimistic price target of €17.70 all these are far from the consensus broker view.

The potential risks to the business aren’t lost on its CEO and president, Hakan Agnevall, who said in a statement: “In the marine market, the uncertain global economic outlook has dampened demand for new ship capacity in 2025. Slowing demand for tonnage, coupled with uncertainties in global trade policies and a strong supply of new ships, has led to mixed market conditions across many vessel segments. However, activity in Wärtsilä’s key segments, such as cruise and ferry, remains supportive.”

He added that the company is also well-positioned as the maritime industry strives for decarbonisation, highlighting Wärtsilä’s carbon capture initiative launched during Q2. Given the company has seen its share price increase by over 900% since IPO, it qualifies into the almost mythical “ten bagger” stocks, a rarity on the markets and an investors’ dream.