BAE Systems Earnings: Record After Record in the Defense Industry
Date: 18 February 2026
Company Overview
BAE Systems PLC, a leading UK defense equipment supplier, has recently released its fiscal year 2025 earnings report, showcasing impressive financial performance that has exceeded shareholder expectations. The company's stock has reached an all-time high valuation of approximately £21 per share.
Financial Highlights
- Annual Revenue: Increased to £28.3 billion, reflecting an 8% year-on-year growth.
- Earnings Per Share (EPS): Rose by 6% year-on-year to 68.8 pence.
- Order Backlog: Expanded by £2.7 billion, totaling £63.1 billion.
- Annual Sales: Increased by 10% to £30.6 billion.
Market Context
Despite challenges in the UK economy, rising geopolitical tensions have fueled demand for defense products, allowing BAE Systems to maintain robust operational performance. The company has highlighted significant increases in defense spending in both the US and the UK, which is expected to drive future growth.
Future Outlook
Management has provided optimistic guidance for the upcoming years, projecting:
- Free Cash Flow (FCF): Expected to reach $1.3 billion by the end of 2026.
- Sales Growth: Anticipated growth of 7-9% for the next year.
- EPS Growth: Projected increase of 9-11%.
- Dividend: Expected to be 36.3 pence per share, marking a 10% increase.
Segment Performance
The platforms and services segment has emerged as the best-performing area, with:
- EBIT: Increased by 30%.
- Sales: Grew by 17%.
Additionally, the air segment saw a growth of 9%, while the maritime segment grew by 11%, although it experienced a 3% decline in EBIT margin.