BAE Systems Raises Dividend as Profits Grow

BAE
Systems
(BA.)
beat
its
earnings
guidance
in
2023,
according
to
its
2023
full
year
results.
The
defence
contractor
reported
soaring
profit
and
revenue
growth,
and
a
larger
order
book
amid
increased
global
interest
for
its
weapons
systems.

BAE
Systems,
which
manufactures
defence,
aerospace
and
security
solutions,
says
pretax
profit
climbed
17%
to
£2.33
billion
in
2023
from
£1.99
billion
a
year
prior.

Revenue
grew
8.6%
to
£23.08
billion
from
£21.26
billion.

Following
the
strong
results,
BAE
is
increasing
its
dividend.
It
recommends
a
final
dividend
per
share
of
18.5p
for
2023,
taking
the
total
to
30.0p,
up
11%
from
27.0p
paid
for
2022.

The
order
book
meanwhile
rose
19%
to
£58.0
billion
from
£48.9
billion.
The
company
cites
M777
deployments
to
Ukraine
and
increased
interest
from
armies
around
the
world.

In
the
report,
the
company
says:
“Our
investments
in
core
franchises
and
our
next-generation
priorities
such
as:
space;
autonomy;
sustainability;
advanced
manufacturing;
and
multi-domain
and
digital
integration,
are
driven
by
the
evolving
threat
landscape.

“At
a
tactical
level,
the
conflict
in
Ukraine
is
highlighting
the
importance
of
a
number
of
these
key
technologies,
especially
autonomy,
synthetic
training,
digital
and
multi-domain
capabilities,
while
also
reinforcing
the
critical
need
for
munitions
and
maintaining
legacy
capabilities.”

Looking
ahead,
the
company
cited
a
“robust”
outlook
for
its
US
government
services
sector
in
Intelligence
&
Security,
with
the
opportunity
for
mid-term
growth
despite
highly
competitive
market
conditions.

BAE
shares
fell
around
3%
to
£12.11
each
on
Wednesday
morning
in
London.

Key
Morningstar
Metrics
for
BAE
Systems

•
Fair
Value
Estimate:
£11.70
•
Current
Price:
£12.11
•
Morningstar
Rating:
★★★
•
Morningstar
Economic
Moat
Rating:
Wide
•
Morningstar
Uncertainty
Rating:
Medium

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