BAE records sales boost and beats estimates as military spending rises

British defence firm BAE announced strong earnings results on Wednesday and forecast higher sales for the coming year as European countries look to improve their military capabilities.

Sales came in at better-than-expected £28.3m (€34.2m) in 2024, a 14% year-on-year jump, while underlying earnings before interest and tax (EBIT) totalled £3.02m (€3.6m), also a 14% rise.

The group’s order intake, meanwhile, came in at £33.7bn (€40.7bn), down from £37.7bn (€45.6bn) in 2023.

Even so, BAE announced a record order backlog of £77.8bn (€94bn) - up £8bn (€9.7bn) on the year.

Underlying earnings per share totalled 68.5p (83c), a 10% increase.

BAE’s board is recommending a final dividend of 20.6p (25c), taking the total dividend for 2024 to 33p (40c). Subject to shareholder approval, this dividend will be paid on 2 June 2025.

The London-based firm, which employs more than 107,000 people in more than 40 countries, builds military equipment including combat vehicles and artillery systems.

For the year ahead, BAE is predicting a 7% to 9% year-on-year rise in sales, notably as European countries prepare to improve military capabilities.

The appointment of US President Donald Trump has turned a tide in Europe, as leaders realise they must become more self-sufficient.

Trump is pushing for NATO member states to increase defence spending to 5% of GDP, warning that the US may not come to their aid if they fail to do so.

At the Munich Security Conference last week, NATO Secretary General Mark Rutte said the alliance's spending target would be "considerably more than 3%" of GDP, up from its current target of 2% agreed upon in 2014.

BAE’s EBIT is predicted to rise by 8 to 10% in the coming year.