BAE Systems plc (BA.L, BAESY), a defense, aerospace and security company, Tuesday said its trading for the period has been in line with management expectations and that it continues to expect higher earnings for fiscal 2017. Further, the company announced more than 1900 job reductions as part of actions to be taken to reduce its current Typhoon and Hawk production rates.
This will make sure production continuity at competitive costs over the medium term, the company noted. The actions are based on the profile of currently contracted and expected aircraft deliveries.
BAE Systems has announced a proposal to reduce the workforce of the Military Air & Information business by up to 1,400 roles. Additionally, and to enhance competitive position, the company plans to cut work force in Maritime Services business of around 375 roles. In the Applied Intelligence business, the company is planning a refocused and more efficient operating model and have announced a proposed workforce reduction of up to 150 roles.
The company said the resultant charges associated with these actions are included in the re-confirmed 2017 earnings guidance.
From January 1, 2018, BAE Systems will implement organisational changes across the firm, other than at its US-managed business, BAE Systems, Inc. In addition, a new role of Chief Technology Officer is being created to enable more effective prioritisation, investment and exploitation of technology.
For fiscal 2017, the company continues to expect underlying earnings per share to be 5% to 10% higher than last year's underlying earnings per share of 40.3 pence. The company continues to expect a small reduction in net debt compared with December 31, 2016.
In the US, the company sees growth in the medium term as defence market outlook remains positive and the production ramp up on a number of the long term programmes is progressing to plan.
In the UK, the company said it is making good progress working with MoD customer on the Dreadnought and Type 26 programmes.
Further, the company said that effective from November 1, Peter Lynas, Group Finance Director and Executive Board Director, will assume responsibility for UK Shared Services, Procurement and Group Mergers & Acquisitions in addition to his existing responsibilities.
The interim dividend of 8.8 pence per share will be paid on November 30.
BAE Systems will announce its financial results for the year ending 31 December 2017 on February 22, 2018.
In London, BAE Systems shares were trading at 616.50 pence, down 0.32 percent.
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