STOCKHOLM: Saab missed fourth-quarter profit forecasts hurt by weak demand in civil aviation, sending shares in the Swedish defence company sharply lower on Thursday.
The maker of the Gripen fighter jet said it expected adjusted operating margins this year to be in line with 2020, organic sales growth of around 5% and positive cashflow, adding that uncertainty due to the pandemic remains high.
Its shares, some 24% lower in the past year, were down 6.5% at 0902 GMT and one of the worst performers on the pan-European STOXX 600 index.
Citi said a weaker outlook on profits, albeit on “thin consensus” would raise some questions.
Saab’s operating profit fell to 766 million crowns from 1.20 billion a year earlier and missed the 1.03 billion expected by analysts, according to Refinitiv Eikon data.
“It was a 4% beat on sales, but a 19% miss on EBIT, with a cash inflow of SEK 3.7bn and strong order growth,” the investment bank said in a note.
Although quarterly order bookings rose 123% to 18.1 billion crowns ($2.18 billion), mostly driven by two large orders, demand remained weak in the civil aviation business.
“In the fourth quarter some of our large customers declared significantly lower production volumes,” CEO Micael Johansson said in a statement.
The earnings included a non-recurring 315 million crown cost related to contract provisions following lower estimated rates of delivery and production volumes in commercial aviation programmes.
Saab proposed a dividend of 4.70 crowns per share, higher than a mean forecast of 3.74 crowns.
The firm’s long-term financial goals include average organic growth of 5% and an operating margin of at least 10% per year over a business cycle.
In the third quarter it took a 1.5 billion crown hit to its operating income as slow recovery from the pandemic affected subcontractors and material supply for its Gripen E/F fighter jet programme.
($1 = 8.3092 Swedish crowns)
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