By Paolo Laudani and Andrey Sychev
(Reuters) -German defence electronics maker Hensoldt forecast higher 2024 sales and orders on Friday, as the wars in Ukraine and the Middle East boost military spending.
Its shares were down 6% by 1440 GMT however, with analysts pointing to a miss in annual orders and profit-taking after shares soared around 30% this year.
The company reported a 5% rise in orders last year to 2.09 billion euros, while analysts had expected 2.2 billion, according to a company-provided consensus.
"Order intake came in slightly below expectations in 2023 due to timing issues, as large orders expected in December were booked in January," Kepler Chevreux analyst Aymeric Poulain said in a note.
The lag in orders could be because of the delay of the 280 million euro ($303 million) NNbS radars order from the German government, Morgan Stanley (NYSE:MS) analyst Ross Law said.
Shares in European defence and arms manufacturers including Hensoldt, Rheinmetall and Thales are trading at historical highs as geopolitical tensions drive the largest increase in defence investments in decades.
Last week, European Commission President Ursula von der Leyen told the Financial Times that Brussels should incentivise Europe's defence industry to increase production and promote consolidation.
During a call with analysts, Hensoldt CEO Thomas Mueller mentioned Taiwan as a market with a "huge upside potential" for the company.
Mueller said Hensoldt has for the first time delivered two of its staple TRML radars, used for air defence, to Taiwan, which China views as its territory.
The partly state-owned company sees revenue of around 2 billion euros this year, above the 1.85 billion reported for 2023, and "significantly faster" growth in orders, without specifying the number.
Analysts polled by LSEG expected sales of 2.2 billion in 2024.
The comparison with consensus is muddied by the proposed ESG acquisition that some analysts' estimates take into account while Hensoldt excludes it, Law said, adding the outlook looked broadly in line with expectations.
($1 = 0.9241 euros)