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Investing.com -- Saab (ST:SAABb) shares jumped more than 11% on Friday after the Swedish defense firm reported a stronger-than-expected second quarter and raised its full-year organic sales growth forecast.
The company now expects 2025 organic sales growth between 16% and 20%, up from a prior range of 12% to 16%, after a 32% organic sales increase in the second quarter.
Total (EPA:TTEF) sales rose to SEK 19.8 billion from SEK 15.2 billion a year earlier, supported by higher delivery volumes across all business segments.
Operating income increased to SEK 1.98 billion from SEK 1.33 billion, lifting the operating margin to 10% from 8.8%.
EBITDA rose to SEK 2.83 billion with a margin of 14.3%. Net income was SEK 1.54 billion, up from SEK 1.01 billion, while earnings per share grew to SEK 2.83 from SEK 1.85.
Order intake dropped 28% to SEK 28.4 billion, mainly due to fewer large contracts. Last year’s figure included a SEK 12.9 billion Carl-Gustaf order from Poland.
Large orders fell to SEK 10.4 billion from SEK 28.9 billion, while small and medium orders rose to SEK 7.1 billion and SEK 10.9 billion, respectively.
Domestic orders made up 57% of the total, led by Gripen E, RBS (LON:NWG) 70 NG and Giraffe 4A systems.
The order backlog rose to SEK 197.6 billion from SEK 187.2 billion at the start of the year, with 71% from international markets.
Net liquidity declined to SEK 690 million from SEK 2.21 billion, and Saab signed a new SEK 6 billion revolving credit facility to replace previous lines.
Free cash flow improved to SEK -1.14 billion from SEK -2.51 billion. UBS noted this beat its own forecast for a SEK -2.5 billion outflow, helped by stronger earnings.
By segment, Dynamics sales jumped 73% to SEK 5.7 billion, with EBIT at SEK 1.19 billion and a 20.9% margin.
UBS called it a key contributor to the overall EBIT beat, despite a 39% order miss. Surveillance sales rose 21% to SEK 6.5 billion with EBIT up 41% to SEK 588 million, beating estimates by 9%.
Aeronautics posted 19% sales growth to SEK 4.4 billion, though EBIT dropped 3% to SEK 249 million, weighed by T-7A startup costs.
“High multiple Dynamics and Surveillance business lines beat although bears will point to weak orders in these segments as well as the weaker than expected Aeronautics business,” analysts at UBS said.
Kockums sales grew 9% to SEK 2.4 billion, while EBIT dipped to SEK 168 million. Combitech saw sales increase 24% to SEK 1.34 billion, and EBIT rose to SEK 113 million.
Research and development spending rose to SEK 1.71 billion for the first half from SEK 1.35 billion. Saab also flight-tested an AI-enabled Gripen and delivered its first export counter-drone system.
The company reduced Scope 1 and 2 emissions by 8% year-on-year and expanded sustainable aviation fuel use.
Workforce grew to 26,134, with women comprising 27%. The workplace injury rate fell 23%.
Saab is cooperating with a U.S. Department of Justice subpoena concerning Brazil’s 2014 Gripen deal. Investigations in Sweden and Brazil were previously closed without findings.