Saab's Strong Q3 Earnings Amid Global Tensions

By Niklas Pollard

STOCKHOLM (Reuters) – Swedish defence material maker Saab 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), compared to 859 million a year ago and exceeding analyst expectations of 1.14 billion, according to an LSEG mean forecast based on three estimates.

The maker of military hardware such as missiles, advanced electronics, submarines, and the Gripen fighter jet reiterated its forecast for sales to grow organically by 15-20% in 2024, with operating earnings expected to rise even more. However, it anticipates organic sales growth to come in at the upper end of the range.

Competing with defense giants like U.S. Lockheed Martin, France's Dassault Aviation, and Britain's BAE Systems, Saab is capitalizing on an industry-wide boom in demand driven by soaring global tensions, particularly due to Russia's war in Ukraine, leading to rapid rearmament.

Sweden's NATO accession is also expected to benefit Saab, which stated that order bookings rose 41% year-on-year in the quarter, with its backlog of orders growing to 190 billion crowns from 139 billion crowns a year ago.

"Deliveries and activity levels across our businesses are high and will continue in the fourth quarter," Saab CEO Micael Johansson stated.

Additionally, the U.S. Department of Justice has requested information from Saab's subsidiary regarding Brazil's purchase of Gripen fighter jets in 2014, linked to a Brazilian corruption probe. The company reiterated its commitment to complying with the request, emphasizing that previous Swedish and Brazilian investigations had shown no wrongdoing by Saab.

($1 = 10.5483 Swedish crowns)