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BAE Systems reports poor 2011 performance but attractions remain for income seekers
As defence contractor BAE systems announces poor full year results, Graham Spooner, investment research analyst at The Share Centre, explains what it means to investors.
“BAE Systems reported a 14% fall in headline sales for 2011, impacted by shrinking demand in the UK and US. The UK order book fell from £39.5bn in 2010 to £36.2bn in 2011. The company continues to operate in a difficult business environment and expects little sales growth and modest earnings growth for 2012 as austerity measures continue.
“Long term investors in the company will know that unpleasant news from BAE Systems isn’t rare. Concerns remain as defence spending reduces in the US and UK, the company’s largest markets, is impacting demand and hindering growth plans.
“The share price has risen recently, however its performance has been uninspiring for some time and investors may well consider selling into the rise. The yield remains attractive for income seekers and they will be pleased to see an increase in the total dividend by 7.4%. However, following today’s results we are reviewing our recommendation on BAE Systems.”
THIS DATA IS PROVIDED BY THE SHARE CENTRE. THIS IS NOT INTENDED TO CONSTITUTE AN OFFER OR AGREEMENT TO BUY OR SELL INVESTMENTS.
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Back2012-02-16 11:25:27 © Moneyextra.com