BAE Systems hikes interim dividend

28th Jul 2011 09:14

BAE Systems reported lower earnings growth in the first half of 2011 hurt by charges and foreign currency headwinds, but shares of the defence group jumped nearly 5% after the firm boosted its interim dividend and announced a £500m share repurchase program. For the six months ended 30 June, the company reported a 13% drop in sales, saying that the fall was in line with expectations. Headline revenue was £9.2bn, compared with £10.5bn last year, hurt by reduced activity following the UK defence secretary Liam Fox's strategic defence and security review in 2010.The company also said it incurred a charge of £160m related to the Omani OPV programme.Going forward, BAE Systems said it continues to expect a reduction in sales for the year and forecasts the underlying earnings to be "broadly similar" to 2010's restated earnings. The company, which makes Challenger tanks, Tornado jet fighters and Astute class submarines, raised its interim dividend by 7.1% to 7.5p per share. Shares of the company were trading 4.9% higher at 306.9p in London.AR