FTSE 100 is listed on aerospace and defense manufacturer BAE Systems (LON:BA), which saw its shares rise on Wednesday, and the company said the order is ahead of pre-prediction forecasts.
Bae said demand remains “high” and celebrated the German parliament’s decision to approve the purchase of 38 Eurofighter Typhoon aircraft. It added that it is working with Eurofighter GMBH and its industrial partners to close the relevant contracts in the near future.
The company also said it has a large backlog of orders and current program positions.
Bae continued, saying the backlog has provided good growth potential for US businesses. It continued to say it will continue to support European and British partners in their efforts to spend 2% of their respective GDP on defense. The company said it will continue its contract support arrangement in Saudi Arabia and is Australia’s leading defense contractor.
Looking ahead, the company holds full year-round guidance on sales and cash flow, but its underlying earnings per share is expected to stand ahead of expectations based on “good operational performance” and low taxes that offset the negative currency impact.
Speaking about the company’s financial performance, BAE CEO Charles Woodburn said, “Thanks to the responsive efforts of employees during these challenging times, we continued to deliver resilient performance in line with expectations for a strong second half.”
“The actions taken in the second quarter to increase our resilience from a position of strength are reflected in our guidance, continuing to realize our clients’ priorities and keeping our employees safe, while still working well with our guidance. The demand for our capabilities remains high, recognizing our role in not only supporting national security, but also contributing to the economy of the country we operate.”
After the update, BAE shares rose more than 2% at lunchtime on Wednesday, exceeding 11/11/20. This price is ahead of the shares, which are 397 points from the previous year, as seen in October. It is also 25% below the analyst’s target price of 620p per share.
Analysts currently have a consensus “purchase” rating on equities. The P/E ratio of 13.05 is below the average of 32.07 for the industrial products sector. The MarketBeat community also has a “low-performance” stance of 50.22% on its stock.
