McAleese: BAE Recorded Sector Profit Growth of 27% in First Half of 2021

A new McAleese & Associates report noted that BAE Systems posted a 6 percent sales growth and saw its sector profit increase by 27 percent to approximately $1.4 billion during the first six months of 2021 driven by its U.S. electronic systems sector and U.K. air sector.

Jim McAleese, founder of McAleese & Associates and a three-time Wash100 winner, reported that BAE’s electronic systems business in the U.S. recorded a 6 percent increase in sales or approximately $3 billion during the first half of 2021.

BAE associated the sales increase with its acquisition of GPS receivers unit and airborne tactical radios business from United Technologies Corp. and Raytheon prior to their merger, McAleese noted.

The U.S. electronic systems sector has completed F-35 lot 13 electronic warfare deliveries. According to the report, about 900 EW systems have been delivered on the F-35 program to date.

McAleese said the sector will not be “materially impacted by potential Lockheed ‘schedule rebaselining’ of F-35 Lot 12-14 ‘Block Buy'” because it is also backing Block 4 modernization, which he said “will see increased Block 4 EW retrofit upgrades to existing F-35 fleet, even if Lockheed slows planned F-35 fresh-production rate during 2022-2024.”

BAE’s U.S. platforms and services sector saw its sales rise by 1 percent to $2.2 billion, while the cyber and intelligence sector posted $1.2 billion in sales, showing a 1 percent growth.

McAleese noted that the defense contractor announced a 5 percent increase in dividend payable on Nov. 30 and a share repurchase program of approximately $700M over the next 12 months.

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