By Cristina Gallardo

BAE Systems said the continuation of the U.S. government shutdown could lead to delays to contract funding and payments.

The London-listed defense company said Wednesday that the U.S. government shutdown hasn't had any material effects yet on its U.S. business, which generated 44% of the group's sales last year, and expressed hopes that the situation would be resolved soon.

On Monday, the U.S. Senate passed a bill to end the record-long government shutdown, which could face a final vote in the House of Representatives as soon as Wednesday.

BAE Systems has around 27 billion pounds ($35.51 billion) in orders booked for the year so far, and said its second-half performance is in line with expectations.

A recent announcement by Norway to buy Type 26 antisubmarine frigates is expected to lead to a substantial order, which would be booked after 2025, the company said.

BAE backed its 2025 guidance, which it lifted in July. It continues to expect sales growth between 8% and 10% for the year, as well as underlying earnings before interest and taxes growth of between 9% and 11%. Underlying earnings per share growth should range between 8% and 10%, while free cash flow should surpass 1.1 billion pounds, it said.

The market should feel encouraged by BAE's year-to-date order intake, which is 8% higher than a year ago and expected to continue rising, Berenberg analysts said.

However, any share price movement on Wednesday may be limited, they added, noting that consensus estimates on earnings-per-share growth are slightly above the guidance range provided by BAE after taking the foreign exchange headwind into account.

The amount of cash returned to shareholders this year will be around 1.5 billion pounds, including 500 million pounds of share buybacks, BAE added.

The stock traded 0.9% higher at 18.15 pounds in early morning in London, and 58% higher year-to-date.

Write to Cristina Gallardo at cristina.gallardo@wsj.com

(END) Dow Jones Newswires

November 12, 2025 04:38 ET (09:38 GMT)

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