Rheinmetall revenue jumps 69% to €3.29B as defense demand surges

Rheinmetall reported Q2 revenue of €3.29 billion, up 69% from a year earlier, beating analyst estimates of €3.16 billion.

The German arms maker said operating profit climbed to €562 million from €276 million a year earlier, topping the €470 million consensus. The company cautioned that operating free cash flow would be significantly negative in the quarter because advance payments shifted into later periods.

Rheinmetall booked €11.37 billion in new orders during the quarter, lifting its total backlog above €80 billion. The haul included a €5.7 billion contract to supply Romania with Lynx combat vehicles, Skyranger air-defense systems and other equipment. The company also signed a memorandum of understanding with Lockheed Martin to jointly produce ATACMS long-range missiles at its Unterluess facility in Germany, with production slated to begin as early as next year.

Shares rose 6.1% in Frankfurt trading, though the stock remains about 25% below its January high after Germany scrapped a large project to procure F126 frigates and peace talk speculation weighed on the sector. Rheinmetall maintained its full-year sales forecast of €14 billion to €14.5 billion, warning of a potential hit of up to €300 million if it fails to mitigate the impact of the frigate cancellation. The company will publish detailed half-year results on Aug. 6.

The earnings beat and record backlog reinforce the structural growth narrative for European defense contractors as NATO members continue to replenish stockpiles. Investors will watch the Aug. 6 earnings call for updated guidance and clarity on the F126 impact.

This article is for informational purposes only and does not constitute investment advice.