BAE Systems upgrades sales forecast despite share price drop

In the United Kingdom, BAE Systems reported a dip in its share price while announcing strong financial performance for the first half of 2025. Despite a decline in its order backlog, sales surged by 11% year on year, totaling £14.6 billion, with significant growth across all divisions. The Air division reported a 9% increase in sales, while the Maritime and Electronic Systems divisions experienced growth of 12% and 9% respectively. In terms of profits, underlying earnings before interest and tax (EBIT) rose by 13%, illustrating improved operational efficiency. However, the order intake fell to £13.2 billion for the first half, leading to concerns about future demand and market competitiveness. Despite these challenges, BAE Systems upgraded its guidance, predicting sales growth of 8% to 10% for FY 2025, surpassing the previous estimate. The company's strong performance is attributed to increased defense spending, particularly from U.S. sectors, and a strategic approach to new markets and projects, which the chief executive, Charles Woodburn, highlighted during discussions with analysts. Free cash flow targets remain above £1.1 billion, signaling a proactive financial strategy in response to market conditions. Analysts have recognized the company's resilience and its ability to navigate the heightened global threat environment, indicating a healthy outlook for BAE Systems in the defense sector moving forward.