BAE Systems (BA.) beat its earnings guidance in 2023, according to its 2023 full year results. The defence contractor reported soaring profit and revenue growth, and a larger order book amid increased global interest for its weapons systems.
BAE Systems, which manufactures defence, aerospace and security solutions, says pretax profit climbed 17% to £2.33 billion in 2023 from £1.99 billion a year prior.
Revenue grew 8.6% to £23.08 billion from £21.26 billion.
Following the strong results, BAE is increasing its dividend. It recommends a final dividend per share of 18.5p for 2023, taking the total to 30.0p, up 11% from 27.0p paid for 2022.
The order book meanwhile rose 19% to £58.0 billion from £48.9 billion. The company cites M777 deployments to Ukraine and increased interest from armies around the world.
In the report, the company says: “Our investments in core franchises and our next-generation priorities such as: space; autonomy; sustainability; advanced manufacturing; and multi-domain and digital integration, are driven by the evolving threat landscape.
“At a tactical level, the conflict in Ukraine is highlighting the importance of a number of these key technologies, especially autonomy, synthetic training, digital and multi-domain capabilities, while also reinforcing the critical need for munitions and maintaining legacy capabilities.”
Looking ahead, the company cited a “robust” outlook for its US government services sector in Intelligence & Security, with the opportunity for mid-term growth despite highly competitive market conditions.
BAE shares fell around 3% to £12.11 each on Wednesday morning in London.
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Key Morningstar Metrics for BAE Systems
• Fair Value Estimate: £11.70
• Current Price: £12.11
• Morningstar Rating: ★★★
• Morningstar Economic Moat Rating: Wide
• Morningstar Uncertainty Rating: Medium