BAESY Bae Systems Plc (PK)

By Anthony O. Goriainoff

BAE Systems PLC reported results for 2020 on Thursday. Here's what we watched:

REVENUE: The U.K. defense-and-aerospace company's revenue came in at 19.28 billion pounds ($27.26 billion) from GBP18.31 billion the year before, benefiting from higher orders.

SALES: The company saw sales--revenue plus the Group's share of revenue from equity accounted investments--rising to GBP20.86 billion for the year, beating market forecasts of GBP20.29 billion, and up from GBP20.11 billion in 2019.

PRETAX PROFIT: BAE Systems's pretax profit slipped to GBP1.6 billion, compared with GBP1.63 billion for 2019.

WHAT WE WATCHED:

--SALES GUIDANCE: The company said that growth for 2021 is expected in Air and Electronic Systems--including the full-year impact of the acquisitions--partially offset by continued weakness in commercial aerospace revenues, and that around 80% of expected sales are already in order backlog.

--FREE CASH FLOW: BAE Systems said it anticipates FCF for 2021 to be in excess of GBP1 billion, and that it has a three-year target in excess of GBP4 billion for 2021 to 2023.

--DEFENSE: The company said its U.S. portfolio remains well aligned with customer priorities, growth areas and the country's national defense strategy, which is expected to continue under the Biden administration. The U.S. represents the world's largest defense budget and accounts for 45% of sales, BAE Systems said.

Write to Anthony O. Goriainoff at anthony.orunagoriainoff@dowjones.com

(END) Dow Jones Newswires

February 25, 2021 10:36 ET (15:36 GMT)

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