By Olivia Bugault
Thales SA backed its 2021 targets on Tuesday after reporting slightly lower sales and higher order intake in its third quarter.
The French aerospace-and-defense company posted sales of 3.56 billion euros ($4.15 billion) in the period compared with EUR3.58 billion the prior year. Organically, sales fell 1.4% due to a "high basis of comparison," especially at its defense-and-security division, it said. Last year, Thales's activities rebounded in its third quarter after being affected during its second quarter by the effects of the coronavirus pandemic and related lockdowns which limited access to its sites and therefore hit production.
Thales's ground-transportation-systems business is now excluded from the results and guidance after the company said in August that it was selling the unit to Japanese conglomerate Hitachi Ltd.'s subsidiary Hitachi Rail for an enterprise value of EUR1.66 billion. Thales said Tuesday that a definitive agreement for the disposal should happen in the first quarter of next year.
Its biometrics and civil aeronautics businesses continue to be affected by the pandemic, but the recovery in short-haul travel and aftermarket activities marked an improvement, it said.
The global semiconductor shortage had an impact of EUR20 million to EUR30 million on the sales of its digital identity and security division, but it will likely recover part of it during the fourth quarter, Chief Financial Officer Pascal Bouchiat said during a call with journalists. Thales uses semiconductors for its credit card and SIM card activities.
The semiconductor situation hasn't improved since the previous quarter, with reduced visibility and tensions on the supply chain that will remain next year, Mr. Bouchiat said, adding that the company continues to have the situation under control. In the third quarter, the digital identity and security division booked sales of EUR736 million, up 0.4% organically.
Order intake rose to EUR2.99 billion from EUR2.73 billion during the period. Order intake stood at EUR1.45 billion at its defense and security division, up 1% organically, and Mr. Bouchiat said that Thales is expecting robust order intake for the division in the last three months of the year.
Thales's sales came 1.4% below consensus, while orders beat expectations by 5%, Citi said, adding that "the market tends to react poorly to sales."
Thales backed all its 2021 targets including sales of between EUR15.8 billion and EUR16.3 billion and an earnings before interest and taxes margin of 9.8% to 10.3%. The outlook is based on the assumption that the health and semiconductor situations won't further deteriorate.
Shares at 0855 GMT were up 1.1% at EUR82.20.
Write to Olivia Bugault at olivia.bugault@wsj.com