Rheinmetall reduced its full-year 2026 revenue outlook to a range of 13.7 billion euros to 14.2 billion euros, down from previous guidance, following Germany’s decision earlier in the year to cancel a major naval warship procurement program. The company had anticipated becoming the lead contractor on the F126 warship initiative.
Despite the guidance reduction, Rheinmetall reported strong operational performance in the first half of the year, with sales reaching 5.2 billion euros and climbing 39% compared to the prior-year period. Profitability expanded even more sharply, with profits rising 74%. Growth was supported by increased deliveries of military vehicles, ammunition, and air-defense systems. The company’s recently acquired naval division contributed 334 million euros to first-half sales.
Rheinmetall’s stock experienced volatile trading following the announcement. Shares initially declined approximately 3% at the open but recovered to trade up roughly 2% before settling near the flatline. CEO Armin Papperger stated the company had achieved record growth and remained positioned to meet annual targets.
The firm logged new orders totaling 14.9 billion euros during the first six months, bringing its order backlog to 80.5 billion euros. However, cash flow turned negative at 1.6 million euros, which the company attributed to shifts in advance payments, inventory accumulation, and substantial investment spending.
The warship cancellation highlighted growing investor scrutiny over whether defense industry valuations have outpaced actual delivery capabilities. Defense stocks more broadly have retreated recently despite multiyear gains, as market participants reassess execution risks alongside expanding order books. Peer Renk also reported earnings Thursday, booking record quarterly orders and raising its first-half backlog by 30% to 7.4 billion euros while maintaining guidance.
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