Indra shares fall over 4% after slow Q1 growth misses expectations

Investing.com -- Shares in Indra (BME:IDR) dropped more than 4% on Tuesday after the Spanish technology and defense group reported weaker-than-expected first-quarter results, marked by slower sales growth and earnings that missed analyst forecasts.

Revenue rose 3% organically to €1.16 billion, down from 7% growth in the previous quarter. The figure came in 4% below consensus estimates, with the shortfall driven by currency effects and reduced election-related activity in the company’s Minsait IT division.

Group EBIT rose 6% to €95 million, with margins at 8.2%, just slightly ahead of last year but still 8% short of consensus. Earnings per share fell 4% from a year earlier to €0.34, also missing expectations by 11%.

Minsait, which accounts for most of Indra’s revenue, posted 1% sales growth to €742 million. The division’s EBIT margin slipped to 7%, though the book-to-bill ratio remained healthy at 1.37.

Defense revenue rose 15% to €225 million, driven by gains in the Eurofighter and Space programs. The EBIT margin for the unit declined to 15.4% from 16.4%.

Air Traffic Management revenue was flat at €118 million, while orders jumped 40%. The margin fell to 13.2% from 13.8%.

Free cash flow rose 14% to €77 million. Indra closed the quarter with a net cash position of €129 million. 

Order intake increased 18% to €1.83 billion, with a group book-to-bill ratio of 1.57. The backlog stood at €8 billion, up 12% from a year earlier. 

Analysts at UBS noted that management expects defense orders to double in 2025 compared with this year, after a 27% gain in the first quarter.

The company maintained its full-year guidance, projecting revenue above €5.2 billion and EBIT over €490 million. 

That implies more than 8% growth for the remainder of the year, compared to 10% in the same period last year.