Defence demand lifts Thales annual earnings
PARIS, March 4 (Reuters) - French defence and technology group Thales (TCFP.PA), opens new tab posted stronger-than-expected 2024 earnings despite losses in space on Tuesday, lifted by robust arms spending and recovering air traffic, and forecast higher sales and profitability for 2025.
Europe's largest defence electronics firm said operating income rose 5.7% on a like-for-like basis to 2.419 billion euros as revenues gained 8.3% to 20.577 billion, with defence growth dwarfing gains in aerospace and cyber on a constant basis.
New orders rose by an underlying 6% to 25.289 billion euros.
Analysts had on average expected operating profit of 2.351 billion euros on revenues of 20.138 billion, and an order intake of 23.76 billion, according to a company compiled consensus.
Thales, whose shares soared alongside those of its peers on Monday after European leaders pledged to boost arms spending, said rising demand had repaid investments in defence capacity.
"Geopolitical instability is a constant and to a great extent it is feeding the investments made by countries in their defence," CEO Patrice Caine told reporters.
Thales said defence sales and profits rose by an underlying 13% last year but aerospace earnings fell by 13.9%, with R&D and restructuring costs weighing on the space business and blotting out double-digit margins in avionics.
Caine said Europe has the technology to assure its own defence but its ability to fill any gaps left by transatlantic tensions will depend on the extent to which political declarations turn into firm defence orders.
Asked about talks between Thales and Airbus (AIR.PA), opens new tab, as well as Thales' traditional partner Leonardo , on a possible new European venture combining loss-making satellite businesses, Caine said he had no information to share just yet.
"Let us work," he told reporters.
For 2025, Thales predicted like-for-like growth in sales of between 5% and 6% to a range of 21.7 billion to 21.9 billion euros, and a 40-60-point increase in operating margins to between 12.2% and 12.4%.
It said orders would continue to outpace sales.
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