By Niklas Pollard
STOCKHOLM (Reuters) -Swedish defence materials maker Saab beat second-quarter working earnings forecasts on Friday and raised its steerage on expectations of even stronger gross sales this yr as European army spending surges.
The information despatched Saab’s shares up 6% in early buying and selling.
The maker of the Gripen fighter jet stated in a press release that working earnings rose to 1.98 billion Swedish crowns ($204 million) from 1.33 billion a yr in the past, outpacing a imply forecast of 1.71 billion seen in a LSEG compilation of analyst forecasts.
Saab, which makes army gear starting from missiles and superior electronics to submarines, stated it anticipated like-for-like gross sales to develop 16% to twenty% this yr, elevating its outlook from beforehand anticipated progress of 12% to 16%.
The corporate, which grew its gross sales by 22% organically within the first half of the yr, reiterated that it expects working revenue to rise even quicker than gross sales.
The group is scaling up manufacturing amid hovering army spending in Europe, the place it generates properly over half of its revenues, within the wake of Russia’s invasion of Ukraine and indicators the area might want to shoulder extra duty for its personal defence.
The army spending increase, additional underlined by NATO alliance members committing to defence price range will increase demanded by U.S. President Donald Trump, has lifted shares of army gear with Saab’s greater than doubling this yr alone.
The corporate, which competes with U.S. agency Lockheed Martin, France’s Dassault Aviation and Britain’s BAE Techniques, has taken on 1000’s of recent employees at the same time as U.S. tariff threats generate uncertainty.
CEO Micael Johansson instructed Reuters that Saab had to date not seen any quantifiable affect on its provide chain from the tariff turmoil although there was nonetheless little readability on the extent to which a prioritised business like defence is perhaps affected.
“Our personal capability improvement, funding in new manufacturing strains and new services, that’s going totally based on plan,” Johansson stated.
($1 = 9.7292 Swedish crowns)
(Reporting by Niklas Pollard; Enhancing by Essi Lehto and Joe Bavier)
