By Niklas Pollard
STOCKHOLM (Reuters) -Swedish defence material maker Saab on Tuesday reported a slightly bigger-than-expected rise in third-quarter operating earnings and affirmed its outlook for surging sales and profits this year as countries scramble to re-arm.
The company reported quarterly operating earnings of 1.19 billion Swedish crowns ($112.8 million) versus a year-ago 859 million and analyst expectations of 1.14 billion, according to a LSEG mean forecast based on three estimates.
The maker of military hardware such as missiles, advanced electronics, submarines and the Gripen fighter jet repeated its forecast for sales to grow organically by 15-20% in 2024 while operating earnings were seen rising even more.
However, it added that it expected organic sales growth to come in at the upper end of the range.
The company, which competes with defence giants such as U.S. Lockheed Martin (NYSE:LMT), France’s Dassault Aviation and Britain’s BAE Systems (LON:BAES), is riding an industry-wide boom in demand as soaring global tensions, not least due to Russia’s war in Ukraine, fuel rapid rearmament.
Sweden’s NATO accession is also expected to benefit Saab, which said order bookings rose 41% year-on-year in the quarter with its backlog of orders growing to 190 billion crowns from 139 billion at the same point a year ago.
“Deliveries and activity level across our businesses are high and will continue in the fourth quarter,” Saab CEO Micael Johansson said in a statement.
The U.S. Department of Justice has requested information from a subsidiary of Saab over Brazil’s purchase of the Swedish firm’s Gripen fighter jets in 2014, which was the subject of a Brazilian corruption probe, the company said earlier this month.
Saab repeated it would comply with the request and that previous Swedish and Brazilian investigations into the deal had showed no wrong-doing by Saab.
($1 = 10.5483 Swedish crowns)