20 Feb 2020
Posted in Aerospace, Defense & Security
BAE’s positive performance will be supported by future armoured vehicle deliveries to the US
Following today’s news (Thursday 20th February) that BAE Systems has met growth forecasts;
Harry Boneham, Associate Analyst at GlobalData, a leading data and analytics company, offers his view:
“BAE Systems has managed to overcome the setback delivered by the slashing of armoured vehicle production for the US Army in its 2021 budget proposal, and future armoured vehicle deliveries to the US will help sustain this performance.
“According to GlobalData’s forecasts, the US armoured vehicle market is projected to register a compound annual growth rate (CAGR) of 2.88% over 2019–2029, with a 2029 value of USD $5.9bn, with BAE Systems expected to grab the second highest revenue share of this over the forecast period.
“GlobalData expects that reported production issues at BAE’s plant in York, Pennsylvania, are the cause of the drop in production of armoured multi-purpose vehicles (AMPV), which is budgeted to fall by 74% between 2020 and 2021, from 121 in 2020 to 32 in 2021, according to the Department of Defense budget request. Similarly, production of the upgraded Paladin is budgeted to fall by 37.5%, from 96 in 2020 to 60 in 2021. However, a number of successes haVE allowed BAE Systems to overcome this setback and increase annual earnings. These include the acceleration of Typhoon deliveries to Qatar under a £5bn contract signed in 2018 and the transition of the F-35 programme to full-production rate.
“With a 7% increase in sales, an order backlog of £45.4bn, and the recovery in armoured vehicle production budgeted for 2022, the company’s forecast of further future growth in earnings is credible.”