Thales Narrows Sales, Margin Guidance

By Mauro Orru

Thales narrowed its forecasts for sales growth and a key profitability margin this year.

The French aerospace-and-defense company said Tuesday that it now expects organic sales growth of 5% to 6% this year compared with 4% to 6% previously. However, its closely watched earnings before interest and taxes margin should come in between 11.7% and 11.8% compared with 11.7% to 12% previously.

Thales is forecasting a negative margin for its space business, citing a drop in commercial telecommunications activity, its decision to maintain a high level of research and development investments, and restructuring costs.

The group in March unveiled plans to redeploy some 1,300 jobs from its space joint venture with Italy's Leonardo within the group in 2024 and 2025, but without any forced departures as it seeks to restore profitability there.

Meanwhile, Thales reported 10.77 billion euros ($11.73 billion) in orders for the first half, up 23% organically. Sales climbed 6% organically to EUR9.49 billion.

Net profit jumped 57% to EUR1.02 billion. EBIT came in at EUR1.10 billion, generating an 11.5% margin.

Analysts had forecast orders of EUR10.38 billion, sales of EUR9.52 billion, EBIT of EUR1.09 billion and an EBIT margin of 11.5%, according to a market consensus provided by the company.

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

(END) Dow Jones Newswires

July 23, 2024 01:23 ET (05:23 GMT)

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