BAE Systems ups outlook amid strong operational, financial performance
BAE Systems PLC on Thursday raised annual guidance after a strong first half of 2026 with profit, sales and free cash flow all improving from a year ago.
The London-based aerospace, arms and information security company said pretax profit rose 7.6% to £1.28 billion in the six months ended June 30 from £1.19 billion the year prior.
Underlying earnings before interest and tax rose 11% to £1.70 billion from £1.55 billion and underlying earnings per share increased 13% to 38.9 pence from 34.7p.
Sales grew 7.9% to £15.77 billion from USD14.62 billion. The order backlog edged up to £84.0 billion from £83.6 billion.
The interim dividend was boosted 11% to 15.0p per share from 13.5p.
Free cash flow totalled £1.79 billion, swung from an outflow of £368 million a year ago, as BAE said it received a number of material advances from customers in the period.
Reflecting the strong operational performance in the first half, BAE Systems raised guidance across all "key" financial performance measures.
"Across the business, our outstanding teams have delivered another strong period of operational and financial performance, which gives us the confidence to upgrade our full year guidance," said Chief Executive Charles Woodburn.
It expects full-year sales growth of 8% to 10%, lifted from between 7% to 9% before. Underlying Ebit is now projected to grow 10% to 12%, raised from 9% to 11% and underlying EPS by 11% to 13% from 9% to 11% before.
Free cash flow is seen at more than £2 billion in 2026, raised from at least £1.3 billion previously. BAE forecast cumulative FCF between 2024 and 2026 of more than £6.7 billion, up from at least £6.0 billion before.
BAE said it will streamline reporting segments from five to four, with Cyber & Intelligence being reported between Platforms & Services and Maritime in the future.
Shares in BAE Systems rose 0.9% to 2,038.00 pence each in London on Thursday morning.
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