The ratings on BAE Systems PLC reflect the company's very strong competitive positions in the worldwide defense market and a moderately leveraged balance sheet, with substantial liquidity, offset by inconsistent profitability and near-term challenges because of a difficult market for commercial aircraft. Also, the firm has an active acquisition program, with the attendant operating and financial risks. Farnborough, U.K.-based BAE Systems is a major supplier of defense electronics; military and commercial avionics and aerostructures; submarines and surface combatants for the Royal Navy; and support services and information technology. In addition, the firm participates in numerous joint ventures, owning 20% of Airbus SAS, a major manufacturer of commercial jet aircraft. Airbus is under near-term pressure due to weak demand for commercial
