STOCKHOLM (Reuters) - Swedish defence firm Saab (SAABb.ST) reported quarterly operating earnings well ahead of market forecasts on Tuesday, and affirmed its view that operating cashflow this year would improve versus 2018.
The Stockholm-based company, maker of the Gripen fighter jet, said its third-quarter operating profit was 518 million Swedish crowns ($53.76 million), versus a 61 million loss in the year-earlier quarter.
Analysts had forecast an operating profit of 301 million crowns according to Refinitiv estimates including three analysts.
Order intake at the firm, which typically sees sharp swings, more than doubled to 9.4 billion crowns from 4.5 billion, with Saab highlighting an order from Finland’s Ministry of
Defence to provide and integrate combat system for Finland’s new corvettes
“Although sales and profits are much better than thin consensus, cashflow is the big focus for the stock,” Citigroup analysts said in a research note.
“Q3 operating cashflow being on target and commentary around cash in Q4 should be taken positively by the market given the recent underperformance of the shares.”
Saab has been burning through cash and last year raised 6 billion crowns to boost its balance sheet, allow it to compete on big new contracts and meet a growing order backlog.
The company said its operational cashflow was developing in line with its plan for the year, adding it still expected better cash flow in 2019 than 2018, with large milestone payments scheduled in the fourth quarter
Saab shares are down 12% over the past three months, compared to a 2% rise for the European industrials sector .SXNP.
($1 = 9.6360 Swedish crowns)
Reporting by Johannes Hellstrom; Editing by Simon Johnson