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BAE Systems share price outperforms after interims

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BAE Systems’ (LON:BA) share price has climbed higher in London this Wednesday as the defence contractor said that its earnings had climbed higher in the first half of the year. The update comes after the company recently signalled a one-off tax-related non-cash benefit to its earnings per share.

As of 13:51 BST, BAE Systems’ share price had added 1.36 percent to 550.00p, outperforming the broader UK market, with the benchmark FTSE 100 index currently standing 0.88 percent lower at 7,579.22 points. The group’s shares have given up more than 15 percent of their value over the past year, as compared with about a two-percent fall in the Footsie.

BAE Systems posts interim

BAE Systems announced in a statement today that its underlying EBITDA had climbed to £999 million in the six months to June 30, from £874 million in the prior-year period, while its sales surged to £9.4 billion, from £8.8 billion a year ago. The company lifted its payout to shareholders to 9.4p per share, from 9.0p.

“The first half performance underpins our guidance for the full year with improvements being made on a number of operational fronts,” the group’s chief executive Charles Woodburn commented in the statement. “Our priority is to deliver consistent and strong operational performance for our customers and shareholders to enable us to meet our growth expectations over the medium term.”

Going forward, BAE expects to deliver underlying earnings per share, excluding the one-off tax benefit, to grow by mid-single digit compared to the full-year underlying earnings per share in 2018 of 42.9p.

Analysts on FTSE 100 group

Deutsche Bank reaffirmed the British defence contractor as a ‘buy’ today, without specifying a target on the BAE Systems share price, while earlier in the week, UBS reaffirmed the company as a ‘neutral’. According to MarketBeat, the blue-chip group currently has a consensus ‘buy’ rating and an average valuation of 608p.

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