BAE on track for full year growth

City A.M. Reporter
BAE Systems said it expected to deliver earnings growth in 2010 and that the loss of a contract to build new armoured vehicles for the UK army had not hit its outlook for the year.

The defence contractor said it expected three of its four divisions to deliver growth in 2010 and that sales at its land and armaments business would improve during the year as efficiency programmes progress.

BAE said order intake had been good during the period and that it had won orders worth £360m on the Astute class submarine programme.

The British government in March awarded US firm General Dynamics the contract to build new armoured vehicles for Britain's army, a significant blow to BAE, which has altered its vehicle production plans because of the contract loss.

“Whilst disappointing, this decision does not impact the outlook for the business ... the group had already embarked on a significant programme of rationalisation in response to reducing land systems activity in the UK,” the company said.

“In aggregate, and despite a planned lower level of land vehicle activity, the Group continues to expect growth for 2010 based on constant exchange rate assumptions.”