Swedish defense group Saab posts drop in Q2 profits, cuts 2010 outlook

Sweden’s Saab says Q2 profit fell

STOCKHOLM — Swedish aerospace and defense group Saab AB on Friday posted a near 40 percent drop in second-quarter net profits, largely due to a terminated customer contract, resulting in a 2010 outlook downgrade.

Net profit in the quarter reached around 177 million kronor ($24 million), tumbling from 294 million kronor in the same three months last year.

Saab, which makes fighter jets and weapons systems, blamed it on a lost contract in its civil security unit and lower capacity use.

Order bookings for the quarter soared to 5 billion kronor, compared with around 4 billion kronor.

As a result, the group’s outlook for 2010 was cut. Saab now expects profitability for the year to remain at the same level as in 2009. It had previously forecast it to be higher.

It’s long-term financial targets remain, however.

Revenues in the April-March period also fell, to around 6 billion kronor from almost 6.3 billion kronor.

“Our strategy, focusing on value creation by delivering on our strategic priorities to increase our market focus, create a more focused portfolio and more efficient operations remain firm,” Saab CEO Ake Svensson wrote in the report, adding that order bookings rose in several business units in the first half.

The share dropped almost 2 percent to 90 kronor ($12.24) in early morning trading on the Stockholm stock exchange.

Saab has around 13,000 employees. It sold its automobile division with the same name to General Motors Co. in 2000, which has now divested it to Dutch carmaker Spyker Cars NV.