Swedish Air Force’s Saab Jas 39 Gripen Jetfighter will take part in NATO exercises as part of the NATO Air Police Mission on July 4, 2023 at Alliance Member ‘Soverign Airspace.
John Tiss | AFP | Getty Images
Shares of Swedish defense giant Saab jumped Friday morning after reporting profits and sales growth exceeded expectations for the second quarter.
The stock saw a 12.16% higher trading at 3:53 ET
Saab’s operating profit for the second quarter was 1.98 billion Swedish Croner ($200 million), marking the 1.71 billion Croner beats expected by analysts voted by LSEG.
Quarterly sales increased 30% year-on-year.
Saab stocks have skyrocketed 131% since the start of the year, according to LSEG data.
The stock is one of many European defence spaces that benefited from a wide range of regional pushes to raise security budgets.
On Wednesday, the European Commission announced a proposal for a 2 trillion euro budget, including major clashes in fundraising for the defense. This comes as part of what the authorities labelled Europe as “an era of recontracts.” This already sees plans to announce a bloc that will mobilize 800 billion euros ($928 billion) to support national security spending.
Meanwhile, members of the NATO Military Alliance recently agreed to raise their defensive spending targets to 5% of gross domestic product.
Speaking to CNBC’s “Squawk Box Europe” on Friday, Saab CEO Micael Johansson said its activities in the European defence market are “really high,” but Saab has “a great portfolio that supports market demand.”
“What you’re seeing over the quarter is that we’ve seen a dramatic increase,” he said. “There are a lot of campaigns going on right now. There’s been a lot of interest and it’s been a bit more recent.”
As for the increased regional defense spending, it was sparked after President Donald Trump called for Europe to take away greater ownership of its own security — Europe said it needs to have the opportunity to strengthen its defense sector.
“The US administration says we must step up in Europe and take great responsibility for our own safety,” he told CNBC.
“So many countries are boosting their own defence industry. Of course, we want to see a level playing field in terms of competition in the market, but I think we need to buy more Europe.
