BAE Systems Reports Strong Results In U.S. Defense Business, Reflecting Sector Trend (From Forbes)
The world’s third largest military contractor seems to be doing remarkably well in the world’s biggest defense market. U.K.-based BAE Systems reported July 30 that all three of the business units in its American subsidiary exhibited favorable trends in the first half of the year. Its military-electronics business saw operating margins increase from 13.8% to 15%, its armored vehicle and ship repair business saw strengthening demand after a long softening, and its information services business turned in good results — despite potentially being put on the block for sale. The latter unit appears to have won a sizable award from an intelligence agency, which might make it more attractive if it actually is offered to buyers. BAE’s first-half results reflect broader trends in the U.S. defense sector, where all the big players are reporting relatively stable revenues, and many are turning in earnings increases. General Dynamics, for instance, saw a 16.4% year-over-year increase in earnings from continuing operations. I have written a commentary for Forbes here.
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