BAE Systems Misses Profit Forecast But Sees U.S. Growth Potential -- Earnings Review
February 22 2018 - 8:51AM
Dow Jones News
By Adria Calatayud
BAE Systems PLC (BA.LN) reported results for 2017 on Thursday.
Here's what you need to know:
EARNINGS: The British defense company made a full-year net
profit of 854 million pounds ($1.19 billion), down 6.5% on year and
missing expectations of GBP1.1 million, according to a consensus
based on eleven analysts' estimates polled by FactSet. The profit
fall reflected a value write-down on the company's cybersecurity
division, it said. Earnings before interest, taxes and
amortization--the company's preferred profit measure--came in at
GBP2.02 billion, in line with a company-provided consensus of GBP2
billion.
REVENUE: BAE generated revenue of GBP18.32 billion, up 3% on
year. Including equity-accounted investments, the weapons maker
reported underlying sales of GBP19.63 billion, 3.2% higher than a
year earlier and mainly due to favorable currency movements.
Analysts expected sales of GBP19.6 billion, according to a
consensus provided by the company.
WHAT WE WATCHED:
U.S. SALES: BAE, which is a major Pentagon contractor, expects
the new U.S. defense spending plan to boost its orders. The U.S. is
the company's largest market and over a third of its revenue is
generated there. "The group's U.S.-based portfolio remains well
aligned with customer priorities and growth areas," BAE said. Chief
Executive Charles Woodburn said the company is well placed to cash
in on an improving outlook for defense budgets in a number of
markets.
COST SAVINGS: The company said the restructuring it unveiled in
October, which comprised cutting almost 2,000 jobs and slowing the
production of Typhoon combat jets, has resulted in a streamlined
organization with a solid foundation for medium-term growth. BAE
didn't provide any financial details of the reorganization. The
company guided for 2018 underlying earnings in line with those of
last year.
Write to Adria Calatayud at
adria.calatayudvaello@dowjones.com
(END) Dow Jones Newswires
February 22, 2018 08:36 ET (13:36 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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