BAE Systems plc lifted its 2026 free cash flow outlook to about £3 billion, as it reported £33 billion in orders and kept its sales and earnings targets unchanged.
The new cash flow estimate compares with previous guidance of more than £2 billion. BAE said it reflects some customer advances already received but does not include any material advances that may arrive later this year. The figure is a forecast, not a full-year result.
The company kept its July outlook for sales and for underlying earnings before interest and tax (EBIT) and underlying earnings per share (EPS). On a constant-currency basis, it expects sales growth of 8% to 10%, underlying EBIT growth of 10% to 12% and underlying EPS growth of 11% to 13%. The guidance assumes an exchange rate of $1.32 per pound.
BAE said it had secured £33 billion in orders as of its Nov. 12 update and anticipated more agreements before year-end. Second-half awards it cited included about £4.3 billion in additional funding for the UK’s Dreadnought-class submarines, about £1.6 billion linked to the Global Combat Air Programme and about £1.5 billion for BAE’s share of MBDA orders. The GCAP figure includes BAE’s portion of a roughly £4.6 billion contract awarded to Edgewing.
BAE said strong results in Electronic Systems, Air, and Platforms & Services outweighed slower growth and weaker margins in Maritime; the company is advancing through the Type 26 frigate program's first-in-class phase. BAE said governments in its markets remain committed to higher defense spending, citing U.S. munitions production, the UK’s Defence Investment Plan and increased investment in Europe. It said it is involved in 10 of 12 U.S. programs selected to significantly increase munitions production capacity.
Chief Executive Charles Woodburn said BAE’s backlog provides “good visibility.” The company expects to return about £1.6 billion to shareholders in 2026, including about £500 million in share repurchases. Its interim dividend is scheduled for payment Dec. 2, and BAE plans to report preliminary full-year results on Feb. 19, 2027.
