BAE Systems posts improving annual profits
BAE Systems, the British maker of military equipment, announced on 21 February 2019 that annual net profit jumped by a fifth, despite a slowdown in demand for Eurofighter Typhoon fighter jets.
Profit after tax rallied 21 percent to £1.0 billion ($1.3 billion) in 2018 compared with a year earlier. The group's earnings performance improved partly due to a lack of exceptional charges - but it cautioned over geopolitical turmoil. Turnover meanwhile was steady at £18.4 billion.
‘The group made good progress in strengthening the outlook and geographic base of the business, with a number of significant contract wins,’ said CEO Charles Woodburn. ‘Delivering a strong operational performance and continued investment will enable us to meet our growth expectations and underpin the long term.’
BAE's share price however fell 5.7% to 475.60 pence in early deals on London's benchmark FTSE 100 index, which was 0.7 lower overall.
‘On the surface, BAE Systems was feeling positive,’ said Spreadex analyst Connor Campbell. ‘However, it undermined all that by reminding investors it is 'subject to geopolitical uncertainties', the kind that could scupper its forecasts.’
More from Defence Notes
-
US lawmakers warn that “more military spending is absolutely necessary” to ensure Pentagon’s readiness
The US Congress has raised concerns about how inflation rates and cuts in main acquisition programmes could affect the US military.
-
Can the US overcome Russian and Chinese nuclear capabilities?
Washington’s ageing inventory and the pace Moscow and Beijing have been modernising their capabilities put in check the US Nuclear deterrence.
-
US FY2024 funding package passes as China closes military capability gap
The Pentagon has been operating under temporary funding since October 2023, which has impacted its main acquisition and development programmes, increasing the capability gap between the US and China.
-
NATO outlines future challenges as Ukrainian funding from US stalls
In 2023, defence spending increased by an unprecedented 11% across European NATO countries and Canada. Since 2014, the group has spent an additional US$600 billion on defence.
-
US Pentagon to reduce investments in main acquisition programmes over FY2025
The DoD requested nearly US$850 billion to fund operations over the next fiscal year. Despite the amount being 1% higher than the FY2024 budget request, it has not covered the 3% inflation rate, which could impact the DoD’s main programmes in the medium and long term.