Selling Typhoon jets to Saudi Arabia gave BAE a big boost
BAE released its full-year results on Thursday, showing a 7% rise in revenue to £17.9 billion ($25.6 billion) and a 15% rise in operating profit to £1.5 billion.
The company singled out "increased aircraft deliveries to Saudi Arabia and sales from the trading of equipment on the European Typhoon programme" for providing a £800 million revenue boost in the UK business.
BAE has a deal to supply Saudi Arabia with Typhoon aircrafts and is paid when they are delivered, hence the boost last year. The company announced it has also signed a deal with Saudi Arabia to supply 22 Hawk Advanced Jet Trainer aircrafts.
Defence companies have struggled with budget cuts in recent years and BAE's results are above analysts' forecasts. BAE says in the update that it is spearheading a "substantial" expansion into corporate and commercial cyber security to help make up some of the difference.
CEO Ian King says in the statement:
We have delivered another year of solid performance. BAE Systems has a large order backlog generated by a well-balanced portfolio of businesses serving the needs of customers in many of the world's larger accessible markets. The Group is well placed to continue to generate attractive returns for shareholders as defence budgets recover and our commercial adjacencies of cyber and commercial electronics continue to grow.
BAE shares popped at the open in London and are now up around 1.3% at 8.40 a.m. GMT (3.40 a.m. ET).
