Rheinmetall Q3 2024 Results: Revenue Tops Expectations, EPS Lags

Revenue growth driven by strong defense demand

German defense and automotive supplier Rheinmetall AG reported better-than-expected third-quarter revenue on Thursday, boosted by robust demand for its defense products amid the ongoing war in Ukraine.

Revenue for the three months ended September 2024 increased by 17% year-over-year to €4.2 billion, surpassing analysts' consensus estimate of €4.1 billion. The growth was primarily driven by higher sales of defense equipment, including tanks, artillery systems, and ammunition.

EPS falls short of estimates due to higher costs

Despite the strong revenue performance, Rheinmetall's earnings per share (EPS) fell short of analysts' expectations.

EPS declined by 5% year-over-year to €2.10, missing the consensus estimate of €2.25. The decrease was attributed to higher production costs, research and development expenses, and supply chain disruptions.

Outlook remains positive

Looking ahead, Rheinmetall remains optimistic about its long-term prospects.

The company expects continued growth in its defense business, driven by increased demand for its products in response to geopolitical tensions and the ongoing war in Ukraine.

Rheinmetall also anticipates further expansion in its automotive segment, particularly in the area of electric and self-driving vehicles.

Conclusion

Rheinmetall's Q3 2024 results highlight the company's strong position in the global defense market.

While the company faces some challenges in terms of profitability, its long-term outlook remains positive, supported by growing demand for its products and its focus on innovation and diversification.