Investing.com - Rheinmetall (ETR:RHMG) has reported a jump in preliminary first-quarter sales that topped expectations, as Europe’s largest maker of ammunition was boosted by solid demand at its defense segment.
Shares in the firm spiked by more than 6% in early European trading on Tuesday.
Group-wide sales during the period rose by 46% to 2.31 billion euros, which the company said was above analysts’ projections of 1.95 billion euros compiled by Vara Research.
Operating profit across the business surged by 49% to 199 million euros, compared with expectations for 165.8 million euros.
"The positive development of the financial figures is exclusively attributable to the very good performance of the defense business, in particular to pull-forward effects from the second quarter to the first quarter," Rheinmetall said in a statement released after the close of markets on Monday.
The firm’s executive board also confirmed its revenue and earnings forecast for the 2025 financial year. Revenue is seen moving upby 25% to 30%, while operating margin is tipped to be around 15.5%.
Rheinmetall flagged that the outlook does not take into account "the improvement in market potential that is likely to arise, particularly in the relevant markets [...] such as Europe, Germany, and Ukraine, as a result of the geopolitical developments in recent weeks."
It added that it will adjust its guidance as necessary "in line with the increasing clarity of its military customers’ requirements in the further course of the year."
Analysts at Morgan Stanley (NYSE:MS) said that they expect Rheinmetall’s second quarter to be "soft" due in part to "some unexpected pull forward effect." However, the analysts said the outlook for the rest of the year is "derisked."