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Saab Ups Earnings Guidance, Remains Cautious

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Robert Wall wall@aviationweek.com

Better than expected sales activity in the first months of the year is allowing Saab to increase its earnings guidance for 2009, but the Swedish defense and aerospace company remains cautious about the long-term outlook.

The company says that for the year, sales will increase over 2008 levels. The previous guidance was for flat sales development. Sales in the first half were up 6 percent to 11.7 billion Swedish kronor ($1.57 billion).

However, Saab notes that it is "facing uncertainties in its business environment" and therefore remains cautious.

In fact, company CEO Ake Svensson notes that as the company restructures, more layoffs can't be ruled out. It already has announced the elimination of 1,000 positions under its so called Billion+ cost savings effort.

For the first half, Saab saw a decline in order bookings, which reached around 8 billion Swedish kronor compared with almost 13 billion in last year's first six months. The company's order backlog has declined to 42.4 billion Swedish kronor, down 4.2 billion Swedish kronor from the same level last year.

Net income for the company came in at 265 million Swedish kronor, a 53 percent drop from the prior year. Operating margin on non-recurring items also has come down significantly, to 4.9 percent from 8.9 percent, largely due to a more conservative accounting approach the company is taking.

Svensson says the ongoing efficiency programs are progressing as expected.

Gripen photo credit: Saab





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