German submarine and frigate builder TKMS provided a muted earnings outlook for 2026 on Monday, underscoring its dependence on large individual orders and payment schedules that sometimes stretch over several years.
The company, spun off from parent Thyssenkrupp in October, expects adjusted operating profit of 100 million to 150 million euros ($117 million to $175 million) in the year through September 2026, compared with 131 million generated in 2025.
Analysts in a company-provided poll forecast adjusted operating profit of 143 million euros in 2026.
TKMS has been benefiting from a surge in investor demand for defence suppliers, driven by shifting U.S. foreign policy that is putting greater pressure on Europe to boost its own defences against Russia, which continues to wage war in Ukraine.
This has helped lift TKMS’s order backlog to 18.2 billion euros at the end of September – more than tripling over the past five years.
“Thanks to our long-term business model and robust order backlog, TKMS is resilient against economic and political change,” CEO Oliver Burkhard said. “We therefore continue to see great potential for future business.”
Shares surged 3.2% in premarket trading at 0704 GMT, boosted by better-than-expected adjusted operating profit in 2024/2025, which rose 53% to 131 million euros, beating the 120 million expected by analysts in a poll.
The profit margin for the year rose to 6%, also beating the 5.6% analysts expected.
($1 = 0.8573 euros)
(Reporting by Christoph Steitz and Tom Kaeckenhoff)
