-Germany’s Renk reported first-quarter revenue slightly below market expectations on Wednesday, but a growing pipeline of orders supported its growth.
The company, which makes gearboxes for the Leopard 2 tanks sent to Ukraine, posted 273 million euros ($305 million) in sales in the first quarter, a slight miss compared with the 279 million euros seen in a Vara consensus.
Its order intake came in at 549 million euros, more than the 500 million euros in a Vara consensus and more than doubled on a yearly basis.
Its shares were up 1.8% shortly after the opening bell at 0700 GMT. The jump in order intake underlines the stock’s strong run this year, says Jochen Stanzl, chief market analyst at CMC Markets in a note.
“However, it is not enough for more than a confirmation of what investors expected. After tripling the price this year, the stock has already anticipated much of the good results,” he says.
As it confirmed its yearly and mid-term guidance, it posted an order backlog worth 5.5 billion euros.
European arms manufacturers are reporting solid results but order backlogs are a concern. Governments in the region are trying to expand their spending in the sector but have to face decades of under investment.
Renk specified that the outlook does not take into account any further market potential from increased defence spending in the European Union.
($1 = 0.8937 euros)
(Reporting by Paolo Laudani in Gdansk; additional reporting by Daniela Pegna; Editing by Tom Hogue and Sharon Singleton)
