Thyssenkrupp’s Job Cuts and Earnings Leap Lift Shares Despite Red Ink

Despite €72M net loss and €1.8B cash burn, Thyssenkrupp shares surge 22% on operational beat. Steel division cuts 11,000 jobs; green steel and submarine contract offer upside.

The contradictions at Thyssenkrupp are sharpening. The industrial conglomerate posted a net loss of €72 million for its second fiscal quarter, burned through €1.8 billion in free cash flow in the first half, and now expects revenues to shrink by as much as 3% this year. Yet its shares have surged 22% over the past 30 days, touching €10.62 on Thursday after a flurry of analyst upgrades.

The trigger was a clear operational beat. Adjusted operating profit rocketed from €19 million to €198 million year-on-year, far ahead of consensus expectations. That resilience, driven by deep cost cuts and a modest recovery in steel markets, prompted Citigroup’s Ephrem Ravi to hike his price target from €13 to €15. Jefferies retained its Buy rating and €13 target, while JPMorgan lifted its fair value to €11.80 but kept a Neutral stance.

Steel bears the brunt of the overhaul

The earnings surprise came largely from the long-ailing steel division, where lower raw material and energy costs provided some relief. But the price of that improvement is severe. Thyssenkrupp plans to cut or outsource up to 11,000 of the 26,000 positions in its Steel Europe unit, triggering substantial restructuring charges. To slash overcapacity, it is selling its stake in Hüttenwerke Krupp Mannesmann to Salzgitter, with a closing target of 1 June.

Management is sticking to its full-year profit forecast despite the softer revenue outlook — a sign that the cost-cutting programmes are taking hold. CEO Miguel López has also reaffirmed the goal of spinning off the Materials Services division, a move that would sharply simplify the group’s structure.

Fresh catalysts on the horizon

Looking further ahead, Thyssenkrupp expects to generate fresh equity from its remaining stake in the former Elevator business within the next 12 to 18 months. Its green steel transformation is also gathering pace: from 2026 the company plans to supply BMW with CO?-reduced material.

A major wild card lies across the Atlantic. The group’s naval unit, TKMS, is competing with South Korea’s Hanwha Ocean for a Canadian submarine contract worth more than US$10 billion. A decision is expected between May and June 2026.

Technical tailwind

Chartists note that the stock has left its 50-day moving average of €8.89 well in the rear-view mirror. With the restructuring narrative now backed by hard earnings momentum and a string of strategic milestones, Thyssenkrupp’s rally appears to have more room to run — provided the operational discipline holds.