Rheinmetall Shares Fall on Defence Guidance Cut Despite Higher Earnings

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By Cecilia Butini
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Shares in German defense company Rheinmetall AG fell in opening trade on Friday after the company reported a guidance cut in its defense business, despite posting higher earnings and sales for the first half of the year.

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At 0800 GMT, Rheinmetall traded 2.3% lower at EUR184.75.

The company posted operating profit of 206 million euros ($211.1 million), up from EUR191 million the year prior and sales of EUR2.67 billion from EUR2.58 billion the previous year.

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It said that it expects sales to come in at the lower end of a previously-given forecast that projected growth of between 15% and 20%, reflecting challenges in global automotive production. Defense order intake is expected to come in 20% lower in 2022, and defense revenue is foreseen as about 4% lower in 2023. This translates into a 3% cut to group profit in 2023, Berenberg analysts said in a note.

“While the lowered defense guidance is due to timing delays rather than to a reduced order opportunity pipeline, we expect the shares to react negatively,” the analysts said, noting that the defense outlook has been the driver of Rheinmetall’s share price year-to- date.

Write to Cecilia Butini at [email protected]

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Credit: www.marketwatch.com /

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