BAE Systems annual earnings fall but dividend rises

Arms company increased sales and operating profits
BAE Systems annual earnings fall but dividend rises
BAE Systems's order backlog dropped to £36.8bn from £40.5bn a year ago.

Defence company BAE Systems (LON:BA.) posted lower underlying earnings but increased its dividend and forecast higher earnings per share in 2016.

BAE, which is involved in making Eurofighter Typhoon jets and aircraft carriers for the Royal Navy, said underlying pre-tax earnings before interest and amortisation (EBITA) fell to £1.68bn from £1.7bn a year ago.

It blamed the fall in EBITA on a previously announced Typhoon production slowdown and Australian shipyard impairment and rationalisation charges.

The company's order backlog also dropped to £36.8bn from £40.5bn a year ago.

But sales rose to £17.9bn from £16.6bn and operating profit increased to £1.5bn from £1.3bn last time. Pre-tax profit advanced to £1.09bn from £882mln beforehand.

Underlying earnings per share lifted to 40.2p from 38p previously and the company increased its total dividend per share by 2% to 20.9p.

The group forecast underlying earnings per share in 2016 would increase by between 5% and 10% against the adjusted underlying earnings per share of 36.6p in 2015.

Shares in the company rose 10.2p, or 2%, to 509.5p in the first hour of trading in London.

Chief executive Ian King said pointed out that its cyber security and commercial electronics businesses, which it is hoping will provide a major source of future growth, were continuing to expand.

King added: "The group is well placed to continue to generate attractive returns for shareholders as defence budgets recover."

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February 19 2014

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