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 navy spending surges.
The information despatched Saab’s shares up 6% in early buying and selling.
The maker of the Gripen fighter jet mentioned in an announcement 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 navy tools starting from missiles and superior electronics to submarines, mentioned 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 navy spending in Europe, the place it generates nicely over half of its revenues, within the wake of Russia’s invasion of Ukraine and indicators the area might want to shoulder extra accountability for its personal defence.
The navy spending growth, additional underlined by NATO alliance members committing to defence funds will increase demanded by U.S. President Donald Trump, has lifted shares of navy tools 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 Programs, has taken on hundreds of recent workers at the same time as U.S. tariff threats generate uncertainty.
CEO Micael Johansson informed Reuters that Saab had thus far not seen any quantifiable influence on its provide chain from the tariff turmoil although there was nonetheless little readability on the extent to which a prioritised trade like defence may be affected.
“Our personal capability growth, funding in new manufacturing traces and new services, that’s going absolutely in response to plan,” Johansson mentioned.
($1 = 9.7292 Swedish crowns)
(Reporting by Niklas Pollard; Modifying by Essi Lehto and Joe Bavier)
Keep forward of the curve with NextBusiness 24. Discover extra tales, subscribe to our publication, and be part of our rising group at nextbusiness24.com
