- Aerospace and defence contractor BAE Systems maintained its full year guidance for sales and cash flow but said it expected underlying earnings per share to be slightly higher than previously guided thanks to a better operational performance and an expected lower tax rate.

In the US, the Group expects its business to continue growing under the Biden administration. Its backlog has grown organically and through two acquisitions made earlier this year giving the firm visibility of growth.

The two-year budget deal enacted in 2019 established a defense spending level of c.$740bn for fiscal year 2021. As lawmakers continue to work on authorization and appropriations bills, Congress passed a Continuing Resolution to provide funding through 11 December, with the CARES Act also extended through the same period.

In the UK, the government has recently re-stated its commitment to meeting the NATO target of spending of at least 2.0% of GDP on defence. The Government's Integrated Foreign Policy, Defence and Security Review is ongoing.

The company sees a stable outlook for its UK operations, with defence revenues centred around long-term, contracted and critical defence programmes in the Air and Maritime domains. The Group has limited UK-EU trading and the majority of the UK workforce are UK nationals so any resulting near-term Brexit impacts across the business are likely to be limited.

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