German defense contractor Rheinmetall announced on Thursday it has lowered its 2026 sales guidance by 300 million euros, attributing the revision to the German government’s cancellation of the F126 warship program. The update was issued as the company reported a 39% increase in sales and a 74% rise in profits for the first half of the year.
The company adjusted its full-year sales forecast to a range of 13.7 billion to 14.2 billion euros. The previous guidance was 300 million euros higher.
Despite the revised forecast, Rheinmetall’s half-year financial results showed significant growth. Sales reached 5.2 billion euros in the first six months of the year. The company stated this growth was driven by increased deliveries of military vehicles, ammunition, and air-defense systems. A contribution of 334 million euros from its recently acquired naval division, Naval Vessels Lürssen, also bolstered sales figures.
“We have achieved record growth and are well on the way to meeting our annual targets,” CEO Armin Papperger said in a company statement.
The adjustment to the company’s sales outlook is directly linked to a decision by the German government in June to cancel its program to acquire six F126 warships. Rheinmetall was positioned to be a lead contractor on the project. Following the June announcement of the cancellation, Rheinmetall’s stock price fell nearly 19%.
On Thursday, following the release of the updated guidance, Rheinmetall shares experienced price fluctuations in early trading. The stock opened approximately 3% lower before changing course to trade 1.4% higher.
The report comes amid a period of increased orders for many European defense companies, including Rheinmetall, BAE Systems, and Thales. The trend has been observed since the full-scale invasion of Ukraine by Russia in 2022, which prompted European governments, including Germany, to increase defense spending.
In a statement from March, Rheinmetall had previously said it was targeting sales growth of between 40% and 45% for 2026, citing an expected need for governments to restock ammunition supplies.
