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Headlines

Thales posts higher quarterly revenue, maintains 2025 targets

Published by Global Banking and Finance Review

Posted on April 24, 2025

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By Tim Hepher

PARIS (Reuters) -French defence, aerospace and cyber group Thales reaffirmed full-year forecasts on Thursday after posting stronger-than-expected first-quarter revenue, though new orders dropped compared with major arms deals recorded a year earlier.

The company, whose portfolio spans fighter radars to seat-back screens for airlines, said it was looking at ways of softening the impact of tariffs, which had so far had no direct impact on its goals for higher sales and profitability in 2025.

Thales posted quarterly sales of 4.96 billion euros ($5.62 billion), up 9.9% from the first quarter of 2024 on a like-for-like basis. New orders fell by a steeper-than-expected 27% to 3.78 billion euros, however, with defence falling short of analyst forecasts.

Thales said the same quarter of 2024 had been bumped up by major contracts including part of an order from Indonesia for France's Rafale fighter jets, for which Thales builds radar.

Analysts had on average been expecting quarterly sales of 4.80 billion euros and an order intake of 4.86 billion euros, according to a company-compiled consensus.

Thales is predicting like-for-like sales growth of between 5% and 7%, with revenues exceeding new orders, and an adjusted operating margin of 12.2% to 12.4% for the full year. It does not report profit figures at the first-quarter stage.

The re-confirmed forecasts take account of the latest state of tariffs and exemptions, the company said in a statement.

Thales' defence business, which makes up just over half its revenues, is mostly immune from trade tariffs and has seen rising demand as Europe responds to the war in Ukraine and waning U.S. interest in security cooperation.

But the partially state-owned group said it was looking at various ways of cushioning the rest of its business including "customer surcharging," a reference to raising prices.

Some airlines have warned of lower growth in air travel, but so far Thales says demand for aerospace products like avionics - which broadly tracks trends in airline traffic - remains robust.

"We are not seeing a negative impact on demand linked to this tariff war," Chief Financial Officer Pascal Bouchiat told reporters.

"Our group is relatively sheltered ... as defence is not involved in the customs duties and we have relatively little flow of goods between the US and the rest of the group."

Thales has a U.S. turnover of around 2.6 billion euros, three quarters of which is generated inside the country, Bouchiat said.

($1 = 0.8818 euros)

(Reporting by Tim Hepher; Editing by Makini Brice and Kate Mayberry)