Saab booked 68.4B crowns in Q2 orders, beating estimates, as European governments boost military spending on Russia fears and NATO pressure.
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Swedish defense company Saab beat earnings expectations in the second quarter, with new order bookings hitting a record 68.4 billion Swedish crowns ($7.1 billion). Analysts had forecast 57.1 billion crowns, according to FactSet. The quarter included a Polish submarine deal worth 47 billion crowns.
The total order backlog reached 317.7 billion crowns, up from 197.6 billion a year ago. That marks five consecutive quarters of growth. Sales came in at 25.5 billion crowns, above the 23.9 billion crown estimate. Operating profit (EBIT) was 2.8 billion crowns, compared with expectations of 2.4 billion crowns.
Saab makes Gripen fighter jets, submarines, missiles, and advanced electronics. Demand has surged since Russia's full-scale invasion of Ukraine in early 2022. European governments are ramping up military spending in response to the Russian threat. U.S. President Donald Trump's push for Europe to bear more of its own defense costs has added urgency.
"We operate in a market with structurally growing demand and remain focused on scaling capacity, delivering to customers, and advancing new capabilities," Saab CEO Micael Johansson said in a statement.
Earlier this month, NATO Secretary General Mark Rutte said the alliance would order up to 10 spy planes from Saab. Based on the price of the GlobalEye aircraft, the deal could be worth nearly $5 billion.
Despite the growing order book and rising profitability, Saab's stock has fallen in recent months. Investors are questioning whether valuations have run ahead of the industry's ability to deliver, the company said.
Sweden joined NATO in 2024, citing Russia's aggression and a shifting security environment. The country has increased defense spending to 2.5% of GDP from 1.2% in 2021, according to data from the Stockholm International Peace Research Institute.
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