BAE Systems eyes more growth after 2020 beat By Reuters

LONDON (Reuters) – British defence company BAE Systems (LON:BAES) forecast another year of growth in 2021, helped by a new order for Typhoon jets and strong demand in its electronic systems unit, after it beat expectations with a 2% rise in annual earnings per share.

For 2021, BAE said that it expected underlying earnings per share would rise by between 3% and 5%.

The company said two substantial acquisitions it made last year in its higher-margin electronic systems unit, which provides flight controls and precision guided munitions for fighter jets, would help boost next year’s outcome.

For last year, BAE posted underlying earnings per share of 46.8 pence, beating a consensus forecast of 43.7 pence, in a result which it said excluded the impact of a prior year one-off tax benefit.

Defence has been one of the few sectors largely unaffected by coronavirus. Bar some teething difficulties in the first half of 2020, BAE’s factories have been operating as normal for most of the pandemic, aided by regular staff testing.

But COVID-19 meant a fall in demand last year for the products and services BAE sells to commercial customers in the aviation, transport and cyber security markets, which it said was offset by continued progress in its electronic systems, fighter jet and combat ship building units.