Show me the money
Profits-wise, Capital IQ last clocked KMW at earning about a 9.5% net profit margin on roughly $900 million in revenues. Nexter Systems, meanwhile, was believed to be earning $99 million in operating profit on $720 million in revenues -- a robust 13.8% margin. Combined, our best guess is that the two companies are therefore earning about 11.4% operating profits before accounting for any synergies from cost-cutting.
Is that something General Dynamics can compete with? Actually, yes. And in fact, it already is.
Just last month, General Dynamics successfully negotiated a sale of 84 M1126 Stryker Infantry Carriers to Lithuania . Meanwhile, the General boasts a robust 15% operating profit margin in Combat Systems (where they build the tanks) on annual revenues of $5.7 billion -- about 160% more than Giat sells in a year.
Call me an optimist, but I think General Dynamics is going to compete with these guys just fine.
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General Dynamics' M1 Abrams main battle tank -- rushing forth to meet the competition. Image source: General Dynamics .
The article Selling Tanks in Europe Just Got Tougher for General Dynamics originally appeared on Fool.com.
Rich Smith does not own shares of, nor is he short, any company named above. You can find him onMotley Fool CAPS, publicly pontificating under the handleTMFDitty, where he's currently ranked No. 308 out of more than 75,000 rated members.The Motley Fool has no position in any of the stocks mentioned. Try any of our Foolish newsletter services free for 30 days . We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Motley Fool has a disclosure policy .
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