Thales (EPA:TCFP) reported strong results for the second half of 2024, with its performance led by a booming defence segment. The French aerospace and defence firm saw its shares jump 7.9% at 04:13 ET (09:13 GMT) as investors reacted positively to the company’s performance.
Thales’ revenue for the period reached €11.08 billion, surpassing consensus estimates by 5%. Its EBIT came in at €1.32 billion, exceeding expectations and reinforcing confidence in the company's operational resilience. Notably, the defence segment was a key driver, recording an impressive 23.9% organic growth in Q4 and 13.3% for the full year, far ahead of initial guidance.
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Jefferies analysts highlighted Thales’ strong free cash flow, which stood at €2 billion—a figure 17% above consensus estimates. Building on its solid performance, Thales raised its medium-term earnings margin target from 17.5% to 18.5% and announced a proposed dividend of €3.7 per share, exceeding market expectations of around €3.47.
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The company’s order intake for Q4 was robust at €9.7 billion, with full-year figures reaching €25.3 billion, surpassing the market consensus of €23.8 billion. With a strong book-to-bill ratio of 1.2x, Thales continues to signal sustained demand across its business segments.
While the defence segment powered overall performance, the aerospace division delivered mixed results. Revenue growth was slightly weaker than expected in the second half, although margins performed better, reaching 7.8% despite ongoing challenges in the space business. The avionics division, however, continued to generate strong double-digit margins, contributing positively to the overall results.
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Thales’ fiscal year 2025 EBIT guidance appears conservative, falling at the lower end of projections and not yet accounting for potential increases in defence spending. This cautious outlook, combined with strong order intake and robust free cash flow, positions Thales well to capitalize on growing defence demands while managing challenges in its aerospace segments.
Overall, with improved earnings margins, a significant order backlog, and enhanced shareholder returns through increased dividends and a healthy share buyback program, Thales is set to continue its trajectory of growth in a competitive global market.
