Britain’s BAE Systems reported a positive trajectory in 2025
In a recent trading update, the UK’s largest defence contractor reaffirmed its full-year guidance for 2025, projecting 8–10% growth in underlying earnings per share and high single-digit revenue growthl. BAE said it has had a “strong start” to the year and is on track with its forecasts, buoyed by a record order backlog and continued government commitments to increase spending. The company highlighted “further positive momentum” expected from new defence investment pledges – notably the supplemental U.S. aid for Ukraine and Britain’s decision to raise its budget to 2.5% of GDP by 2030. These policy moves translate into concrete contracts for BAE: for example, in March BAE won a major deal under the AUKUS pact to help build nuclear submarines for Australia. Its order book has swelled to over £66 billion after two years of elevated orders, spanning everything from fighter jets and warships to munitions. Financially, BAE is leveraging this demand surge effectively – it maintained guidance given in February, indicating no negative surprises on costs or execution so far. Shares of BAE are up ~24% year-to-date, reflecting investor confidence. The company also benefits from a balanced portfolio (about 45% U.S. exposure, 40% UK/Europe, 15% Middle East), so increased European spending and high U.S. outlays both flow into its top line. One note of caution from management is supply chain timing, but BAE has managed to secure key inputs to deliver on big programs. In sum, BAE’s latest results/trading updates suggest Europe’s defence revival is translating into profitable growth. The firm’s CEO sees this as a long-term inflection: he is “investing in [the] business to boost capacity” and position BAE for even “additional defence spending in a rapidly evolving world”, rather than treating it as a short-term windfall.
Sources
UK's BAE says it is well-positioned for future defence spend