By Dhirendra Tripathi
Investing.com – Thales SA (PA:TCFP) stock traded 5.5% higher in Paris Thursday after its aerospace business returned to profitability in 2021.
A higher dividend and a buyback announcement are also adding to the gains in the stock.
The company booked earnings before interest and taxes of 202 million euros ($224 million) in 2021 against a negative EBIT of 76 million euros a year ago. Order intake grew the most in Thales’ aerospace business, by 47% in the year. Aerospace contributes around 28% to the company’s sales, second to defense and security’s 51%.
The company booked record orders of almost 20 billion euros in the year, closing with a backlog of 34.7 billion euros.
While the company will take a hit of 100 million euros in 2022 sales to Russia and Ukraine, the company’s stock has been bouncing in the wake of the conflict between the two countries on prospects of new orders as more countries raise their defense spending.
The French company said its 2021 operating profit rose to 1.7 billion euros on sales of 16.2 billion, up 5.3%.
Assuming no major disruptions to supply chains in the year and in the backdrop of sanctions on Russia, Thales is expecting its 2022 revenue to be 16.9 billion euro at the center of its guidance range, up 4.3%. Margins are seen higher too.
In addition to December's 0.60 euro per share payout, the company said it will pay a dividend of 1.96 euro and buy back around 7.5 million shares, equivalent to 3.5% of its capital. At its current price of 109 euro, the exercise, to be carried through March 2024, will mean a payout of around 818 million euros. The company did not indicate the price it will repurchase at.