LONDON (ShareCast) - (Sharecast News) - BAE Systems upgraded its full-year guidance on Wednesday following "another strong" performance in the first half against a market backdrop of increased defence spending.
The company now expects full-year sales growth of between 8% and 10%, up from previous guidance of 7% to 9%. Underlying earnings before interest and tax are expected to grow between 9% and 11%, up from previous guidance of growth of between 8% and 10%.

It said the share price increase since the start of the year is expected to result in fewer shares being repurchased. This, along with a marginally higher tax rate, means BAE's guidance for earnings per share growth remained unchanged at between 8% and 10%.

For the six months ended 30 June, BAE reported a 13% increase in underlying EBIT to £1.6bn, while sales rose 11% to £14.6bn, with all sectors contributing growth.

The order intake fell to £13.2bn from £15.1bn in the same period a year earlier.

Chief executive Charles Woodburn said: "Our teams have delivered another strong operational and financial performance in the first half of the year, giving us the confidence to upgrade our guidance. In this heightened global threat environment, we continue to deliver mission critical capabilities to armed forces around the world and invest in our people, technologies and facilities to drive the improved efficiency, capacity and agility needed to meet the increasing demand for our highly relevant products and services.

"The breadth and depth of our geographic and product portfolio, together with our trusted track record of delivery, strengthen our confidence in the positive momentum of our business."



At 0945 BST, the shares were down 1.3% at 1,797.62p.

Russ Mould, investment director at AJ Bell, said: "Investors might not have liked the news it expects to buy back fewer shares following a strong run, nor the fact its earnings per share guidance has been left unchanged.

"Investors have lofty expectations for all defence stocks and they might have been banking on a significant upgrade to earnings guidance. Without that catalyst, the shares are vulnerable to a bout of profit taking.­­"

Email this article to a friend

or share it with one of these popular networks:

• DIGG
• FACEBOOK
• STUMBLEUPON
• MIXX
• YAHOO BUZZ
• DELICIOUS
• REDDIT
• NEWSVINE