BAE Systems has upgraded its full-year 2026 (FY26) financial targets after reporting robust operational and financial results for the first half (H1).
The company now forecasts sales growth of 8–10% for the year, up from the previous 7–9% range, alongside higher projections for profit and free cash flow.
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Underlying earnings before interest and tax (EBIT) are expected to rise by 10–12%, while guidance for underlying earnings per share (EPS) has increased to a range of 11–13%.
For the six months ended 30 June 2026,the company’s sales increased by 9%, with all sectors contributing to revenue growth.
Its underlying EBIT was up 11% in H1 FY26, lifting the group’s return on sales to 10.8% and underlying EPS rose by 13% to 38.9 pence. Free cash inflow reached £1.8bn, attributed by the company to a high level of customer advances.
Order intake for the first six months reached £16.4bn ($21.96bn), with BAE Systems closing the period at 30 June 2026 with a record order backlog of £84.0bn, up from £83.6bn at year-end 2025.
Key contract wins in the half included a UK Government agreement to provide Türkiye with training, support equipment, and services for 20 Typhoon aircraft.
Manufacturing is underway in the UK and across Eurofighter partner countries, with first delivery scheduled for 2030.
BAE Systems also coordinated with the Royal Air Force on the rapid deployment of an APKWS precision weapon solution on Eurofighter Typhoon aircraft, moving from successful test firing to operational use in the Middle East within two months.
At the Farnborough International Airshow, BAE Systems unveiled Brontanax, a UK-developed uncrewed autonomous Collaborative Combat Aircraft intended to deliver both electronic warfare and precision strike capabilities.
Internationally, the group secured its first global contracts for the Global Combat Air Programme (GCAP), valued at over £5bn, supporting advanced concept and design phases.
Other major agreements included a seven-year US framework deal to expand production of infrared seekers for the THAAD interceptor missile, a $535m award for M109A7 howitzers, and contracts for Archer and Tridon Mk2 artillery and anti-aircraft systems through its Swedish Bofors business.
BAE Systems also progressed its space sector activities by completing a preliminary design review for the Epoch 2 missile warning satellite programme for the US Space Force and receiving additional funding.
The company is supporting Australia’s largest-ever defence export, an A$2.5bn High Frequency Surveillance system for deployment in Canada, effective from July.
In the UK maritime sector, the group won a further £5.9bn to fund critical work on Dreadnought-class nuclear deterrent submarines.
BAE Systems chief executive Charles Woodburn said: “The global threat picture remains highly volatile and governments are responding with sustained increases in their defence budgets.”
