BAE Systems meets earnings forecasts, sees more growth this year

© Reuters. FILE PHOTO: A sign adorns a hangar at the BAE Systems facility in Salmesbury

LONDON (Reuters) – British defence company BAE Systems (L:) met forecasts with annual earnings growth of 7% and said work on F-35 fighter jets and its Qatar Typhoon contract would help earnings to grow by a mid-single digit percentage next year.

Earnings per share came in at 45.8 pence for 2019, at the upper end of a forecast for a mid-single digit rise on 2018’s 42.9 pence, helped by an improved operational performance and a slightly lower tax rate.

The maker of Typhoon fighter jets, combat vehicles and Astute Class nuclear-powered attack submarines, said that its guidance for 2020 did not include any boost from acquisitions announced in January, which should complete later this year.

BAE made its biggest acquisition in over a decade last month when it said it would spend $2.2 billion on U.S. satellite navigation and radio businesses.

The company’s chief executive Charles Woodburn said in a statement that he was pleased with 2019.

“We delivered a good set of financial results in line with guidance, growing sales and earnings, with improved operational performance and increased investment in the business to underpin our growth outlook,” he said.

BAE has been focused on boosting performance in its combat vehicle business in the U.S., where it has some big contracts, an area where it has faced challenges.

The group also said on Thursday it would make a 1 billion pound ($1.29 billion) one-off payment into its pension scheme in the coming months, funded by debt. Previous commitments to pay around 240 million pounds into the scheme this financial year, and 250 million pounds next year, will continue.

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