AIR Airbus SE

By Robert Wall 

LONDON--BAE Systems PLC Wednesday said business in 2016 has started well, allowing Europe's largest arms maker to confirm its full-year earnings targets.

Deals secured in the first few months of the year included a commitment by the U.K. and France to jointly build a combat drone demonstrator under a GBP1.6 billion ($2.3 billion) program, a contract from the British government to continue development work on the future Type 26 combat ships, and a Kuwaiti order for 28 Eurofighter Typhoon combat aircraft. The Typhoon is jointly built by BAE Systems, Airbus Group SE and Finmeccanica SpA, which secured the Kuwait contract.

"Whilst economic and geopolitical conditions remain volatile, we have started the year with good momentum and the business is performing well, " Chief Executive Offiicer Ian King said ahead of the company's annual shareholder meeting later in the day.

BAE Systems said underlying earnings per share this year should rise 5% to 10% over the 36.6 pence in adjusted underlying earnings, which excludes some one-time tax benefits, reported for 2015.

BAE Systems is in the middle of a leadership transition process. The company in February named oil industry executive Charles Woodburn to the newly created post of chief operating officer, making him the heir apparent to the CEO. The handover isn't expected before next year.

BAE Systems also said the European missile joint venture of MBDA, involving Airbus and Finmeccanica, also continued to secure deals. The value of first-quarter deals to BAE, which owns 37.5% in the partnership, was GBP182 million, the company said.

Write to Robert Wall at robert.wall@wsj.com

(END) Dow Jones Newswires

May 04, 2016 02:54 ET (06:54 GMT)

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