German defense giant Rheinmetall on Wednesday evening lowered its forecast for the whole year, citing delays in military contracts and munitions deliveries.
It is the company’s second reduction in forecasts since August, when Germany scrapped plans to build warships, which would have been Rheinmetall’s largest order since World War II.
The defense company now expects sales to be around €13.2 billion ($14.9 billion) in 2026, down from a previous forecast range of between €13.7 billion and €14.2 billion. Operating margin is expected to be around 18.5%, down from the 19% previously expected.
Rheinmetall said it was revising its forecast for 2026 due to delays in Germany’s Arminius Boxer military project, now scheduled to enter service next year, and setbacks in acceptance testing of artillery munitions.
Shares fell as much as 15% in early trading.
Before Thursday’s trading, shares were down about 35% year to date, following an average annual return of 114% over the previous four years, as they became a major beneficiary of increased military spending by European governments amid Russia’s full-scale invasion of Ukraine in 2022.
Rheinmetall shares over the past five years.
RBC analysts called the announcement “clearly negative”, citing concerns about the timing, scope and impact of the Boxer program on medium-term forecasts. They warned the news could fuel broader investor concerns about traditional defense technologies.
“We believe bears will view this negatively as part of the ongoing sector debate between new tech and old tech,” they said.
The drop in forecasts comes as the German group published improving results, with sales up 32% year-on-year to 3.15 billion euros in the third quarter and operating profit up 62% to 553 million euros.
New orders amounted to 2.89 billion euros, bringing its order book to 78 billion euros at the end of the third quarter.
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