BAESY Bae Systems Plc (PK)

   By Adria Calatayud 
 

BAE Systems PLC (BA.LN) reported results for 2017 on Thursday. Here's what you need to know:

EARNINGS: The British defense company made a full-year net profit of 854 million pounds ($1.19 billion), down 6.5% on year and missing expectations of GBP1.1 million, according to a consensus based on eleven analysts' estimates polled by FactSet. The profit fall reflected a value write-down on the company's cybersecurity division, it said. Earnings before interest, taxes and amortization--the company's preferred profit measure--came in at GBP2.02 billion, in line with a company-provided consensus of GBP2 billion.

REVENUE: BAE generated revenue of GBP18.32 billion, up 3% on year. Including equity-accounted investments, the weapons maker reported underlying sales of GBP19.63 billion, 3.2% higher than a year earlier and mainly due to favorable currency movements. Analysts expected sales of GBP19.6 billion, according to a consensus provided by the company.

WHAT WE WATCHED:

U.S. SALES: BAE, which is a major Pentagon contractor, expects the new U.S. defense spending plan to boost its orders. The U.S. is the company's largest market and over a third of its revenue is generated there. "The group's U.S.-based portfolio remains well aligned with customer priorities and growth areas," BAE said. Chief Executive Charles Woodburn said the company is well placed to cash in on an improving outlook for defense budgets in a number of markets.

COST SAVINGS: The company said the restructuring it unveiled in October, which comprised cutting almost 2,000 jobs and slowing the production of Typhoon combat jets, has resulted in a streamlined organization with a solid foundation for medium-term growth. BAE didn't provide any financial details of the reorganization. The company guided for 2018 underlying earnings in line with those of last year.

Write to Adria Calatayud at adria.calatayudvaello@dowjones.com

(END) Dow Jones Newswires

February 22, 2018 08:36 ET (13:36 GMT)

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