BAE Systems Plc upgraded its full-year guidance on Wednesday following "another strong" performance in the first half against a market backdrop of increased defence spending.
The company now expects full-year sales growth of between 8% and 10%, up from previous guidance of 7% to 9%. Underlying earnings before interest and tax are expected to grow between 9% and 11%, up from previous guidance of growth of between 8% and 10%.
BAE said it continues to expect underlying earnings per share growth of 8% to 10%.
For the six months ended 30 June, BAE reported a 13% increase in underlying EBIT to £1.6bn, while sales rose 11% to £14.6bn, with all sectors contributing growth.
The order intake fell to £13.2bn from £15.1bn in the same period a year earlier.
Chief executive Charles Woodburn said: "Our teams have delivered another strong operational and financial performance in the first half of the year, giving us the confidence to upgrade our guidance. In this heightened global threat environment, we continue to deliver mission critical capabilities to armed forces around the world and invest in our people, technologies and facilities to drive the improved efficiency, capacity and agility needed to meet the increasing demand for our highly relevant products and services.
"The breadth and depth of our geographic and product portfolio, together with our trusted track record of delivery, strengthen our confidence in the positive momentum of our business."
Aarin Chiekrie, equity analyst at Hargreaves Lansdown, said: "BAE Systems delivered a blockbuster set of first-half results, with growth across all business units, giving management the confidence to upgrade its full-year guidance. The UK's largest defence company manufactures heavy-duty military equipment like fighter jets, aircraft and submarines. The group's diversified portfolio sees it win contracts from around the world, with nearly 45% of its £14.6 billion of first-half sales coming from the US. BAE looks well-positioned to tap into new funding available for some of the administration's big-money projects, including the Golden Dome missile defence system.
"Overall demand for BAE's products and services has remained strong over the first half, helping new orders flow in and keeping the order backlog at a mammoth £75.4 billion, just shy of record levels. And with NATO members recently committing to boost defence spending from 2% to 5% of GDP by 2035, that figure looks set to rise even further in the years ahead. These orders are typically long-cycle, with programs spread over many years, giving BAE great revenue visibility. It's these defensive characteristics in an uncertain macroenvironment that have helped boost BAE's valuation, which now sits well above its long-run average. But with a new super cycle of defence spending underway, there could be a long runway of growth ahead if BAE can execute well."