ECB keeps interest rates on hold amid tariffs uncertainty
Investing.com -- Thales (EPA:TCFP) reiterated its full-year guidance after delivering better-than-expected revenue in the first quarter, but missed expectations for new orders following a sharp drop.
The company’s shares fell more than 4% in Paris trading.
The French aerospace, defense, and cybersecurity group reported sales of €4.96 billion ($5.62 billion), marking a 9.9% year-on-year increase on a like-for-like basis and exceeding the €4.80 billion consensus forecast.
The strong sales performance was overshadowed by a 27% drop in new orders, which came in at €3.78 billion, falling short of analyst expectations of €4.8 billion.
The company attributed the year-on-year decline to a tough comparison with the first quarter of 2024, which had benefited from large contracts, including part of an Indonesian deal for Rafale fighter jets, where Thales supplies radar systems.
Jefferies analysts said the new orders decline "should limit the share performance on an otherwise solid sales release."
Thales maintained its outlook for 2025, including like-for-like revenue growth of 5% to 7% and an adjusted operating margin between 12.2% and 12.4%. The group typically does not disclose profit figures in its first-quarter update.
Barclays (LON:BARC) said their Thales thesis remains unchanged after the company confirmed its outlook. "Due to Thales diverse portfolio, the company exhibits greater cyclical characteristics relative to European defence peers," analysts led by Milene Kerner wrote.
Thales also noted it is exploring ways to mitigate the effects of tariffs. So far, those trade measures have not altered its financial targets for the year.
"We are not seeing a negative impact on demand linked to this tariff war," Thales CFO Pascal Bouchiat told reporters.
"Our group is relatively sheltered ... as defence is not involved in the customs duties and we have relatively little flow of goods between the US and the rest of the group."