LONDON (Reuters) - Britain's BAE Systems (LON:BAES) said it was on track to meet guidance for higher earnings and forecast "further positive momentum" from a recent UK government commitment to raise defence spending.
BAE's order book, like that of many western defence companies, has swelled over the last two years as governments have reacted to heightened geopolitical risk in the wake of the war in Ukraine and amid growing tensions with China.
BAE, Britain's biggest military contractor which makes submarines and fighter jets and supplies munitions, said it was sticking to forecasts given in February for its earnings per share to grow 6%-8% in 2024 on revenues 10-12% higher.
It said it would benefit from the recent passing of the U.S. supplemental aid package to Ukraine and the commitment Britain made in April to spend 2.5% of GDP a year by 2030.
In March, BAE won a huge contract to help Australia build nuclear-powered submarines under the AUKUS security pact, and the company said it was well-positioned for further developments in this area.
"With our global presence and wide portfolio of high-end technologies and services, any further expansion of the current AUKUS programme would enhance our long-term opportunity pipeline," the company said in a statement ahead of its annual general meeting later on Thursday.
Shares in BAE have risen 24% in the year to date, giving the company a market capitalisation of 42 billion pounds ($52 billion).
($1 = 0.8012 pounds)