United Kingdom-based BAE Systems yesterday posted higher sales and earnings for its 2008 fiscal year led by growth in its defense business in the United States.
BAE’s U.S.-led defense work accounted for 59 percent of the company’s $26.5 billion in sales in 2008, which were up 18 percent from $22.5 billion in 2007. The organic sales increase was driven by the higher U.S. sales, which benefited from work on the Mine Resistant Ambush Protected (MRAP) vehicle program.
Net income for the year increased more than seven-fold to $997.1 million on the higher U.S. sales, pension accounting adjustments and foreign currency changes, namely the strengthening dollar in the second half of 2008.
Growth at the segment level was driven primarily by Land and Armaments, which posted 38 percent organic growth on the MRAP, armored Humvee, Bradley Fighting Vehicle, Family of Tactical Wheeled Vehicles and U.K. munitions programs. Looking ahead, BAE said growth in this segment will depend on operating tempo in Iraq and Afghanistan.
The company’s Electronics, Intelligence and Support (EIS) segment also posted sales gains, up 6 percent organically, and a double-digit increase in operating earnings.
The growth at Land and Armaments and EIS was partially offset by lower sales in the International and Programmes and Support segments, which were down on lower Eurofighter revenues.