BAE Systems Lifts Guidance As Defense Spending Booms -- Update

BAE Systems raised its sales, profitability and free-cash-flow outlook for the year after a strong first half, citing sustained government defense spending amid escalating geopolitical tensions. The U.K. defense contractor now expects sales growth of 8% to 10% versus a prior forecast of 7% to 9%. It lifted its underlying earnings before interest and taxes growth target to 10% to 12% from 9% to 11%, with underlying earnings per share growth of 11% to 13% versus 9% to 11%. Free cash flow should exceed 2 billion pounds, up from more than 1.3 billion pounds. The company reported 16.4 billion pounds in orders in the first half, taking backlog to 84 billion pounds, and also won a 5.9 billion-pound nuclear deterrent submarine contract.