BAE Systems has delivered a “solid” performance” over the past year according to its annual results.
Operating profits rose from £806m to £1.3bn over 2014 while sales fell from £18.1bn to £16.6bn globally for the defence and security firm.
The fall was said to be due to exchange rates and a one off payment linked to the price settlement on the sale of Typhoons to Saudi Arabia.
The company said earnings were hit by the expected cut-backs in defence budgets in the US and UK but signalled that earnings per share would be likely to rise in 2015 because of orders for naval equipment and aircraft.
The company pointed to notable successes during 2014 which included a £365m contract to integrate an electronically scanned radar on Typhoon plus additional weapons and sensors onto the aircraft.
There was also a £120m two-year agreement with French counterpart, Dassault Aviation, to develop a Future Combat Air System and the successful completion of a second phase of flight testing for unmanned technology demonstrator, Taranis.
2014 also saw more work on the F-35 programme, delivering 45 major units in 2014 with work under way for the next tranche of major units to be delivered in 2015.
Work on the Omani Typhoon and Hawk aircraft contract continues, with sub-assembly manufacture for both aircraft types commencing and first deliveries on schedule for 2017.
The firm also finalised an agreement worth £100m, to extend the Typhoon Availability Service with the RAF at Coningsby, Lincolnshire for 12 months.
Chris Boardman, Managing Director of BAE Systems Military Air and Information, said: “In 2014 we made real progress on our key programmes with acceleration of capability expansion on the Typhoon aircraft, successful completion of the second phase of flight testing on the unmanned combat demonstrator Taranis and continued delivery on the F-35 Lightning II programme.
“We also secured contracts to continue the vital support we provide to the Royal Air Force’s fleet of Typhoon and Tornado aircraft and welcomed the UK and French Government’s two-year feasibility study on Future Combat Air System technology.
“Although we continue to operate in a challenging environment I am confident we have the skills and ability to continue to meet these challenges and deliver against our commitments.”