By Niklas Pollard
STOCKHOLM (Reuters) -Swedish defence tools maker Saab reported a barely bigger-than-expected rise in quarterly working earnings and maintained its outlook for surging gross sales and income this yr as international locations race to scale up militaries.
Saab repeated on Friday its forecast for gross sales to develop organically by 15-20% this yr, with working earnings to rise much more.
The maker of defence materials together with missiles, submarines and the Gripen fighter jet mentioned working revenue rose 25% to 1.33 billion Swedish crowns ($125 million) within the second quarter, simply forward of the 1.29 billion seen by analysts in keeping with LSEG estimates.
The corporate, which competes with the likes of U.S. large Lockheed Martin (NYSE:), France’s Dassault Aviation and Britain’s BAE Programs (LON:) is seeing a increase in demand spurred by international tensions, the conflict in Ukraine and Sweden’s latest NATO accession.
Saab, which additionally sells tools for civilian use to prospects resembling Airbus and Boeing (NYSE:), mentioned order bookings leapt 176% year-on-year within the quarter, with its backlog of orders hitting a document 182.7 billion crowns.
“This marks the second-highest quarter by way of order bookings within the firm’s historical past,” CEO Micael Johansson mentioned in a press release.
“The pressing want to supply Ukraine with extra help and a transparent uplift of European defence capabilities will stay a driver of progress within the trade for a few years.”
Saab shares have surged greater than 70% this yr, including to sturdy positive factors lately. The inventory was down 1.3% at 0720 GMT.
“General, a strong set of outcomes that met bold consensus expectations,” Citi analysts mentioned in a observe.
“Nonetheless, given the very excessive valuation and progress expectations, no steering upgrades could disappoint. However, extraordinarily sturdy orders affirm (the) progress narrative.”
Saab is increasing capability in Sweden and India and can construct a manufacturing plant in the US, although it has but to pick the situation. Johansson advised Reuters that Saab had roughly added a web 1,600 employees within the first half of the yr.
“There’s simply an unimaginable quantity of issues taking place,” he mentioned. “That is one thing that usually goes properly, although it is not with out rising pains.”