German arms manufacturer Rheinmetall has reported a significant increase in sales projections for the current year, predicting growth of up to 45%. This follows a 29% year-over-year revenue increase for 2025, although this figure fell short of market expectations. The company has indicated that it is in a favorable position to assist the U.S. in replenishing missile stockpiles utilized in ongoing conflicts, such as in Iran, particularly through the supply of essential solid rocket motors.
In a presentation accompanying its earnings announcement, Rheinmetall emphasized that “higher spend for missile restocking and air defense” is now “inevitable,” reflecting a growing trend of heightened military spending driven by escalating conflicts in Ukraine and Iran. With an expected doubling of its order backlog to €135 billion (approximately $145 billion) this year, Rheinmetall asserts that the current security climate strongly reinforces the group’s expanding role in enhancing defense capabilities in Germany and allied nations.
The company, ranked as Germany’s seventh-largest by market capitalization, has shared its outlook for 2026, forecasting a sales increase between 40% and 45%, with revenue potentially reaching between €14 billion and €14.5 billion ($16.26 billion to $15.75 billion). The anticipated operating margin is expected to rise to 19%, an increase from 18.5% in 2025. Jefferies analysts have labeled this guidance as “realistic but soft,” underlining the challenges in meeting heightened market expectations.
CEO Armin Papperger remarked on the rapidly changing global landscape, asserting that Rheinmetall is well-prepared to meet the needs of modern armed forces in the 21st century. Following the announcement, shares of Rheinmetall saw a 5.2% decline in early trading, in contrast to a 0.7% drop in the pan-European Stoxx 600 index. Despite a strong year, where sales reached €9.94 billion ($11.56 billion), this total was below the anticipated €10.53 billion, according to LSEG estimates.
Earnings before interest and taxes amounted to €1.68 billion, again missing expectations of €1.75 billion. Meanwhile, the company reported a record-high order backlog of €63.8 billion, representing a 36% increase from the previous year. Morningstar analyst Loredana Muharremi noted that as defense spending accelerates in Europe, particularly in Germany, delayed programs are expected to convert into contracts, bolstering Rheinmetall’s growing backlog.
In February, after revealing its sales projections for the year, shares dropped 6.5%, prompting Barclays analysts to describe this decline as a significant overreaction. They emphasized that while expectations are high, Rheinmetall’s structural growth remains intact, particularly in the weapon and ammunition sectors. Over the past three years, the company’s shares have surged approximately 540%, although investor sentiment has moderated recently due to concerns about sustaining long-term growth, evident as shares were up only 3.4% year-to-date heading into Wednesday’s trading.
Looking ahead, Rheinmetall is pivoting away from its civilian automotive business to concentrate on meeting escalating defense demands. Following its acquisition of shipbuilder Naval Vessels Lürssen, the company has also expanded into the naval sector. Recent geopolitical tensions, particularly following attacks on Iran, have further raised fears of broader conflict in the region, potentially augmenting military equipment demand. In November, Rheinmetall projected a fivefold increase in sales over the next five years, driven by robust weapon system demand amid ongoing geopolitical strife.
As the company anticipates substantial revenue growth, particularly from vehicle systems and weapons and ammunition, it has proposed a dividend increase to €11.50 per share, up from €8.10 last year, signaling confidence in its financial trajectory amid a tumultuous global landscape.
Original Source: https://www.cnbc.com/2026/03/11/rheinmetall-rhm-fy-earnings-stock-2025.html
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Publish Date: 2026-03-11 14:28:00
