The defence and aerospace giant posted an eight per cent rise in overall group sales to £17.9bn, but saw underlying earnings fall one per cent to £1.68bn due to previously reported slow sales of its Eurofighter Typhoon fighter jets.
Its bullish outlook comes as welcome cheer after BAE warned in November that 2015 results would be hit by the move to slow jet production, while it also announced up to 371 jobs were being axed.
BAE employs around 900 people at its site in Brough, East Yorkshire, in roles including engineering and manufacturing.
The firm now expects recovering defence budgets around the world to see its earnings per share rise by between five and 10 per cent in 2016.
Britain increased its budget for defence equipment in November, to £178bn over the next 10 years, while BAE is also expected to benefit from improving military spend in the United States.
BAE chief executive Ian King said the group was well placed to benefit as "defence budgets recover", which comes after a spending squeeze in recent years.