BAE Systems plc (LON: BA) expects 'modest' earnings growth this year.
The shares of BAE Systems (LSE: BA) (NASDAQOTH: BAESY.US) advanced 3p to 378p this morning as investors studied the defence group's latest update and its 5.2% yield.
BAE said today that trading since the start of the year had been "consistent with management expectations" and confirmed underlying earnings per share were expected to grow "modestly" during 2013.
The FTSE 100 member added that underlying earnings per share could be increased by a further 3 pence should discussions concerning the Salam Typhoon programme conclude satisfactorily.
The Salam Typhoon programme concerns an order of 72 Eurofighter Typhoons for the Royal Saudi Air Force, the requirements of which were changed during 2011 and have since prompted protracted price negotiations.
BAE admitted today's forecast did not reflect the potential impact on the US defence sector arising from any automatic cuts to the country's government spending.
However, the company did say it was awarded a £504m contract from the US Army during March to manage an ammunition plant for five years.
Based on BAE's 2012 results, the company is currently valued at less than 10 times earnings and offers a 5.2% yield.
Of course, whether those ratings, today's update and the general outlook for the defence industry all combine to make BAE a 'buy' right now is something only you can decide.
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> Maynard does not own any share mentioned in this article.