BAE Systems First Half Results

BAE Systems, one of the world's top ten arms contractors, is set to announce its first half results on Wednesday. Here are the key details to watch out for:

Revenue Forecast

According to a company-compiled consensus, BAE Systems is expected to report revenue in the range of £11 billion to £11.39 billion ($14.12 billion to $14.62 billion). This represents an increase from the £9.74 billion reported in the first half of 2022.

Underlying EPS Forecast

The company-compiled consensus suggests that underlying earnings per share, excluding exceptional and other one-off items, will be between 24.3 pence and 27.3 pence. This compares to 24.5 pence in the same period last year.

What to Watch

Guidance

Investors will be keen to see if BAE Systems is on track to achieve its full-year targets, with a particular focus on any potential impact of currency fluctuations. The company has previously guided for a 3% to 5% revenue increase in 2023, reaching £23.26 billion.

Orders

The first half book-to-bill outturn is expected to be supported by the Saudi Typhoon support contract, submarine funding, and Czech orders for the BvS10 armored vehicle. Discussions will likely center around order cadence expectations for the second half, full year, and future opportunities, given the rising defense spending in BAE's key markets.

M&A

Recent rumors suggest that BAE may be interested in Ball Corp's Aerospace unit. With a reported value of $5 billion, BAE's mergers and acquisitions strategy may become a topic of interest.

Share Buybacks

Investors will be looking for an update on BAE's share buyback program, as approximately £450 million remains from the current £1.5 billion program initiated in 2022. Given the recent M&A rumors, the relevance of the share buybacks is particularly noteworthy.