By Anthony O. Goriainoff
BAE Systems raised its full-year forecast after reporting a rise in first-half pretax profit reflecting record order books as governments spend more on defense.
The U.K. defense-and-aerospace group raised its sales guidance by 200 basis points to 5% to 7%, from previous guidance of 3% to 5%. Underlying earnings before interest and taxes are now seen rising by between 6% and 8%, up from a range 4% to 6%. Underlying earnings per share guidance went up 500 bps to 10% to 12%, from a prior 5% to 7%.
The company said order intake in the first half was 21.1 billion pounds ($26.96 billion) compared with GBP18 billion last year, resulting in a record order backlog of GBP66.2 billion.
Pretax profit for the half year was GBP1.2 billion compared with GBP779 million for the first half of 2022.
Underlying earnings per share–the company’s preferred metric, which strips out exceptional and other one-off items–rose to 29.6 pence a share from 24.5 pence a share in the year-prior period. Company-compiled underlying EPS consensus was in the 24.3 pence to 27.3 pence range.
BAE–which makes a range of military hardware and software, mainly in the U.S. and U.K.–generated revenue for the period of GBP11 billion compared with GBP9.74 billion the year before and a company-compiled consensus of between GBP11 billion and GBP11.39 billion.
The company added that it has launched a further share buyback program of up to GBP1.5 billion.
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