BAE Systems 2017 Profit Falls; Expects Stable Underlying Earnings for 2018

   By Adria Calatayud 
 

BAE Systems PLC (BA.LN) said Thursday that net profit fell 6.5% in 2017, as it guided for 2018 underlying earnings in line with those of last year.

The British defense company made a net profit of 854 billion pounds ($1.19 billion), down from GBP913 million in 2016, it said. Net profit was forecast at GBP1.1 billion, according to a consensus based on estimates by 11 analysts polled by FactSet.

Pretax profit was GBP1.13 billion, slightly below GBP1.15 billion a year earlier. Earnings before interest, taxes and amortization--the company's preferred profit measure--rose 6.8% on year to GBP2.02 billion.

BAE's revenue increased by 3% to GBP18.32 billion, from GBP17.79 billion in the prior year, the company said. Sales including equity-accounted investments rose to GBP19.63 billion from GBP19.02, benefiting mainly from currency fluctuations, the company added.

The company's order backlog fell to GBP41.2 billion from GBP42.0 billion in 2017. On a constant-currency basis, the order book was unchanged, BAE said.

"With an improving outlook for defense budgets in a number of our markets, we are well placed to generate good returns for shareholders," said BAE Chief Executive Charles Woodburn.

However, the company expects underlying earnings per share for 2018 to be in line with that of 2017--42.1 pence a share--reflecting the impact of the adoption of accounting standard IFRS 15. BAE also anticipates its underlying effective tax rate for 2018 to decrease to 18% from 21%, following tax reform in the U.S.

The board declared a final dividend of 13 pence a share, leaving total dividends for the year at 21.8 pence a share, up 2% on year.

Write to Adria Calatayud at [e-mail]

(END) Dow Jones Newswires

February 22, 2018 02:50 ET (07:50 GMT)

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