Rheinmetall Lowers Outlook Despite Strong Q3

Rheinmetall AG has lowered its full-year revenue guidance despite a strong third quarter, a move attributed to anticipated delays in both the Boxer project and the acceptance of artillery ammunition orders. The company now expects revenue of approximately €13.2 billion for 2026, down from a previous range of €13.7 to €14.2 billion.

While the Q3 results showed a robust 32% increase in revenue to €3.149 billion compared to the same period last year, and a significant 62% jump in operating profit to €553 million, these gains will not be sufficient to offset the impact of the delayed orders. The operating margin improved from 14.8% to 17.5% during the quarter, demonstrating strong profitability in the period. However, the revised guidance indicates a slight decrease in the overall expected operating margin for the year, now projected at around 18.5% compared to the previous estimate of around 19%, due to a shift in product mix.

The delays stem from postponed order confirmations for the Arminius project and anticipated delays in the acceptance of artillery ammunition, pushing associated revenue into 2027. Furthermore, anticipated revenue opportunities related to a collaboration with Dutch firm Destinus within the weapon and munition segment will also not fully materialize this year. Despite these setbacks, Rheinmetall maintains its expectation that the free cash flow (OFCF) for the full year will remain positive, albeit falling short of the previously anticipated cash conversion rate of over 40%.

The announcement caused a roughly 2% drop in Rheinmetall's stock price on Tradegate. The lowered guidance reflects a recalibration of expectations following the delays in key projects, despite the company’s continued strong performance in the third quarter, and the shift in revenue recognition into the next fiscal year.