Saab, the Swedish defense company, has exceeded expectations with its third-quarter earnings and has subsequently raised its full-year guidance. This comes as global defense spending continues to rise at an impressive rate.
In Q3, Saab achieved a net profit of SEK652 million ($58.5 million), a significant increase from the SEK305 million reported in the same period last year. Meanwhile, sales rose by 32% to reach SEK11.53 billion.
According to a FactSet poll of analysts, the projected net profit for this quarter was expected to be SEK508 million, whereas the company exceeded expectations with its reported SEK652 million. Similarly, the projected sales figure was expected to be SEK10.36 billion, but Saab surpassed this with its actual sales of SEK11.53 billion.
Order bookings for the quarter saw an increase of 93% to reach SEK14.98 billion, surpassing the projected figure of SEK11.61 billion. Furthermore, the order backlog stood at SEK138.5 billion, compared to SEK112.03 billion in the previous year.
Saab attributes its success to the growing geopolitical tensions around the world, which have led to a surge in defense investments. This has driven the largest increase in defense spending in Europe over the last three decades.
Saab’s Chief Executive, Micael Johansson, affirms that the company is proactively investing in capacity building to meet customer demands and is focusing on strengthening its portfolio through research and development investments.
As a result of their strong performance, Saab has revised its organic sales growth forecast for 2023. It now expects growth between 19% and 23%, as opposed to the previous projection of 16%-20%. Additionally, the company anticipates higher operating income growth than organic sales growth for this year, while maintaining positive operational cash flow.
In summary, Saab’s impressive third-quarter earnings and increased full-year guidance reflect the significant growth in defense spending worldwide. The company remains focused on securing customer demands and strengthening their capabilities to ensure a robust portfolio moving forward.