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BAE Systems share price dips as group posts drop in HY earnings

Shares in BAE Systems (LON:BA) have fallen into the red as the blue-chip group reported that its earnings had fallen in the first half of the year. The British defence contractor, however, reaffirmed its full-year guidance.

As of 09:48 BST, BAE Systems’ share price had given up 1.59 percent to 642.80p, underperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.87 percent lower at 7,681.18 points. The group’s shares have added about 6.5 percent to their value over the past year, as compared with about a 3.6-percent gain in the Footsie.

BAE Systems posts results

BAE Systems announced in a statement today that its underlying earnings per share had dipped to 19.8p in the six months ended June 30, down from 20.2p in the prior-year period. The British defence giant also posted a drop in sales, from £9.47 billion to £8.8 billion, while the group’s order intake came in at £9.7 billion, as compared with £10.7 billion in the prior-year period.

BAE Systems reaffirmed its full-year guidance, saying that it continued to expect its underlying earnings per share to be in line with the full-year underlying earnings per share for 2017, with some small additional benefit from exchange translation. The company further noted that some programme execution issues encountered in its Platforms & Services (US) and Maritime divisions in the first half are expected to be covered primarily by higher earnings in the Electronic Systems business and the Cyber & Intelligence sector.

Analysts on British group

The 18 analysts offering 12-month price targets for BAE Systems for the Financial Times have a median target of 710.00p on the shares, with a high estimate of 830.00p and a low estimate of 480.00p. As of July 27, the consensus forecast amongst 21 polled investment analysts covering the blue-chip group has it that the company will outperform the market. 

As of 10:05 BST, Wednesday, 01 August, BAE Systems plc share price is 639.40p.

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