BAE Systems says order backlog at record high as revenue rises 14%
Britain’s largest defense firm BAE Systems said on Wednesday that its order backlog rose 11% to a record high at the end of 2024, as it reported a 14% increase in annual revenue for 2024.
Operating profit rose 4% to £2.69 billion ($3.39 billion) over the period.
“Based on the exceptional visibility of our record order backlog and sustainability of our value-compounding business model, we remain confident in the positive momentum of our business into the future,” CEO Charles Woodburn said in a statement.
BAE Systems and other European defense companies have posted share gains this week on expectations of higher government spending.
BAE Systems.
Matt Dorset, equity analyst at Quilter Cheviot, said in emailed comments that the results had exceeded consensus expectations across the board, including on earnings per share, organic sales and underlying earnings.
“We continue to see structural tailwinds supporting BAE, driven by increased global defense spending,” Dorset said.
“Not only will larger defence budgets drive demand, but Europe is also likely to focus on enhancing its own defence production capabilities rather than relying on US exports.”
“BAE Systems, as a pureplay UK defence company with substantial exposure to European demand, is well-positioned to capitalise on this.”
— Jenni Reid
UK inflation jumps to higher-than-expected 3% in January
Annual U.K. inflation rose to 3% in January, higher than analyst expectations, according to data released by the Office for National Statistics on Wednesday.
Economists polled by Reuters had expected a reading of 2.8%.
Read more here.
— Holly Ellyatt
Philips CEO says Chinese consumer recovery is ‘when not if’ story
Philips CEO Roy Jakobs said Wednesday that recovery in Chinese consumer demand was a “when not if” story, after the health-care technology giant reported a double-digit fall in China sales.
“We believe [Chinese demand] will come back, long term it’s attractive, but we’re just not sure when it’s going to happen and when it’s going to hit that inflection point,” Jakobs told CNBC’s “Squawk Box Europe.”
Jakobs said that the importance of health care to the country’s ageing population meant pent-up demand would start to build up, and that he foresees strength in North America sales to continue.
On the risks to the business from U.S. President Donald Trump’s tariff threats, Jakobs said Philips had already been reducing its exports from China to the U.S. and had included the impact in its current guidance.
He added that “uncertainty around tariffs” was why the company had provided a wide adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) margin outlook for 2025 of 30 to 80 basis points.
Philips reported a 1% increase in comparable sales growth for both the fourth-quarter and full-year 2024 on Wednesday. Its net loss widened to 698 million euros ($729.9 million) from 463 million euros on an annual basis, with fourth-quarter performance slipping year on year from a 38 million euro profit to a 333 million euros loss. That weaker annual loss was in part due to a nearly 1 billion euro provision after it settled in a long-running U.S. case over its Respironics devices.
Jakobs said 2024 had been a “pivotal” year for Philips in which it had reduced liability and improved its fundamentals, including margin expansion and strong cash generation.
— Jenni Reid
Philips sales slightly higher but miss expectations amid China weakness
Dutch health-care technology group Philips on Wednesday reported comparable sales growth of 1% for the fourth quarter and 1% for the full year 2024, as strength in North America was offset by a double-digit decline in China.
The quarterly figure was below market expectations, according to Reuters.
Sales fell in its Diagnosis and Treatment and Personal Health units, and rose 7% in its Connected Care business.
The company said its outlook was for 1%-3% comparable sales growth in 2025, with a mid- to high-single-digit decline in China.
Philips share price.
European stocks are outperforming their U.S. counterparts — but for how long?
European markets: Here are the opening calls
European markets are expected to open in mixed territory Wednesday.
The U.K.’s FTSE 100 index is expected to open 5 points lower at 8,763, Germany’s DAX up 9 points at 22,868, France’s CAC down 12 points at 8,209 and Italy’s FTSE MIB 58 points higher at 38,686, according to data from IG.
Earnings come from BAE Systems, Glencore, Rio Tinto, Koninklijke Philips and Carrefour.
Data releases Wednesday include the latest U.K. inflation data. Economists polled by Reuters expect the U.K.’s consumer price index to have risen to 2.8% in January, up from 2.5% the previous month.
— Holly Ellyatt
