Shares in Rheinmetall jumped almost 4 percent to a 10-year high in early trading on Wednesday. By 0924 GMT, they were up 3.7 percent at 74.81 euros.

Earnings before interest and tax (EBIT) were 353 million euros ($373 million), above the 342 million-euro average estimate in a Reuters poll.

EBIT at the defence unit, for years the group's problem child, jumped 63 percent to 147 million euros, taking its EBIT margin to 5 percent. Orders rose 13 percent.

The more profitable automotive unit posted a modest EBIT increase of 3 percent and a margin of 8.4 percent.

Rheinmetall will publish detailed 2016 results on March 23.

($1 = 0.9476 euros)

(Reporting by Georgina Prodhan; Editing by Joshua Franklin and Maria Sheahan)