Europe’s biggest defence contractor BAE Systems said it expected earnings to rise marginally this year after it reported 2014 annual earnings broadly in line with forecasts.
For 2014, BAE posted earnings per share (EPS) of 38p, compared with a company-supplied consensus forecast of 37.7p, in line with its guidance for a 5-10 per cent reduction compared to the year before.
The company’s earnings have in recent years been impacted by cuts to defence budgets in the United States and Britain, its two biggest markets.
The company said that in 2015 earnings per share were expected to be marginally higher, a forecast which included some reliance on anticipated new orders for naval equipment and aircraft, such as the Eurofighter Typhoon jet which it builds.
Chief Executive Ian King said the company was well-positioned to deliver shareholder value, even as the outlook remained mixed in terms of military budgets.
“In the UK, we benefit from long-term contracts, notwithstanding continued pressure on public spending,” he said in a statement on Thursday.
“We believe U.S. budgets are now relatively stable, with some early indications of a modest improvement in 2016.”
BAE’s guidance for slight growth in 2015 EPS tallies with a current consensus forecast for EPS of 39.4p.
Last year’s drop in annual earnings was attributed to the absence of a one-off benefit from a price settlement with Saudi Arabia over the sale of Eurofighter Typhoons, which had boosted 2013, the conclusion of some contracts in the U.S. and currency headwinds.