BAE Systems Plc Could Deliver Double-Digit Growth In Earnings

The shares of BAE Systems (LSE: BA) (NASDAQOTH: BAESY.US) were flat at 440p this morning after the defence giant confirmed it was on track to deliver double-digit growth in earnings per share this year.

These results were dampened slightly, however, by BAE’s warning that it could suffer from delays in its Saudi jet fighter deal and a protracted US government shutdown.

Speaking on the political situation in the United States, BAE revealed that 1,200 of its employees had temporarily been told not to report for work since 1 October.

Meanwhile in the UK, BAE is negotiating with the Ministry of Defence to restructure its naval shipping business, in order to reflect future warship demand.

Updating the market on its other foreign operations, the company added:

“International market activity remains vibrant with multiple opportunities being pursued, including prospects in the United Arab Emirates for the supply of Typhoon aircraft and other capabilities. £5bn of non-UK/US order intake has been achieved in the year to date.”

With a market cap of £14bn, BAE’s shares trade at 11 times expected earnings, and offer a prospective dividend yield of 4.6%.

Of course, whether that valuation, today’s statement and the future prospects for the defence industry all combine to make shares of BAE a ‘buy’ remains your decision.

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> Mark owns no securities mentioned in this article.