Rheinmetall Shares Climb After Strong Quarter as Defense Spending Stays Healthy — Update

By Mauro Orru

Rheinmetall shares jumped after the arms maker said it had logged strong growth in second-quarter revenue and earnings, a sign that demand for military equipment remained solid amid high geopolitical tensions.

The group said preliminary figures showed that revenue jumped around 69% on year to roughly 3.29 billion euros, equivalent to $3.75 billion. Analysts had forecast 3.16 billion euros in revenue, according to Vara Research. Operating profit climbed to 562 million euros from 276 million euros, also above consensus of 469.9 million euros.

Robust growth shows that Rheinmetall continues to benefit from higher defense spending following Russia's invasion of Ukraine. Members of the North Atlantic Treaty Organization have placed a steady stream of orders for ammunitions, air defenses and other military equipment in recent years as they seek to replenish their stockpiles after diverting weapons to Kyiv.

Rheinmetall shares in Frankfurt gained about 5% on Wednesday, though the stock is down about 25% since January as mentions of peace talks between Russia and Ukraine as well as in the Middle East weighed on the sector.

Rheinmetall said it had booked 11.37 billion euros in orders for the quarter, lifting its backlog above the 80 billion-euro mark. The company had forecast bookings of 20 billion euros, but warned earlier this month that Germany's decision to scrap a project to procure F126 frigates would dent orders.

In recent weeks, the group secured a contract valued at 5.7 billion euros to supply Romania with Lynx combat vehicles, Skyranger air-defense systems, medium-caliber ammunition for air defense and armored personnel carriers, two offshore patrol vessels and two diver-support vessels.

In a bid to focus entirely on its burgeoning defense business, the company in June agreed to sell its automotive business to Munich-based industrial group Aequita for a provisional price of 350 million euros.

Earlier this month, Lockheed Martin and Rheinmetall signed a memorandum of understanding to establish a partnership to jointly produce American missiles in Europe, kickstarting a collaboration that is set to bolster Europe's defense capabilities.

Production of long-range Army Tactical Missile System, or ATACMS, will take place at Rheinmetall's Unterluess facility in Germany, one of its largest sites that makes weapon systems and ammunition and tracked vehicles. Rheinmetall said a rocket-motor facility there was nearing completion, with production slated to begin as early as next year.

The company said it expected significantly negative operating free cash flow in the second quarter, citing payments for capacity expansion plans. It is scheduled to post a full set of second-quarter results on Aug. 6.

Write to Mauro Orru at mauro.orru@wsj.com

(END) Dow Jones Newswires

July 29, 2026 07:52 ET (11:52 GMT)