Rheinmetall’s shares fell over 5% in pre-market trading after the German defense giant reported weaker-than-expected Q2 results. Revenue rose 8.9% to €2.43 billion, missing analyst forecasts of €2.53 billion, while operating profit edged up just 2.2% to €276 million. The operating margin dropped to 11.3% from 12.1%, signaling profitability pressures. More alarming was the collapse in new orders—down 65% year-over-year to €1.8 billion—as Germany’s political uncertainty and delayed NATO decisions stalled defense contracts. Management blamed postponed budget approvals following recent elections but maintained full-year targets of 25–30% revenue growth and a 15.5% margin.
Backlog Offers Cushion Despite Short-Term Woes
The company highlighted a record €63 billion order backlog, up €14 billion from 2023, as evidence of long-term resilience. Executives expressed confidence in refilling pipelines once European rearmament gains momentum, though analysts remain skeptical amid the Q2 slowdown. While civilian divisions struggle, Rheinmetall’s defense business is poised to rebound—if political gridlock eases.
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