German defense giant Rheinmetall cut its full-year guidance late Wednesday, citing delays to military contracts and ammunition deliveries.
It marks the company’s second outlook cut since August, when Germany scrapped plans to build warships in what would have been Rheinmetall’s biggest order since World War II.
The defense company now expects sales to rise to around 13.2 billion euros ($14.9 billion) in 2026, down from a prior outlook range of between 13.7 billion and 14.2 billion euros. It is expected to have an operating margin of around 18.5%, down from the previously expected 19%.
Rheinmetall said it’s revising its 2026 guidance due to delays in the German military’s Arminius Boxer project, now expected to be commissioned next year, and setbacks in artillery ammunition acceptance testing.
Shares fell as much as 15% in early trading.
Coming into Thursday trading, shares were re down roughly 35% year-to-date, following an average annual return of 114% over the prior four years as it became one of the main beneficiaries of ramped-up 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 over the Boxer program’s timing, scope and impact on medium-term guidance. They warned the news could fuel broader investor concerns about traditional defense technology.
“We suspect bears will see this negatively as part of the ongoing ‘new-tech vs old-tech’ sector debate,” they said.
The guidance cut came as the German company posted improving results, with third-quarter sales increasing 32% year-on-year to 3.15 billion euros and operating profit jumping 62% to 553 million euros.
New order intake was 2.89 billion euros, bringing its backlog to 78 billion euros by the end of the third quarter.