The British parent company, which makes about half of its revenue in the United States, said last month that delays on a big Saudi Arabian deal and lower spending by European and U.S. military customers had pushed earnings 3 percent lower in the first half of the year.

COMMERCIAL AVIATION OPPORTUNITY

Like many companies in the sector, BAE is also expanding its work in nondefense areas, including commercial aviation.

It almost sold a $1 billion-plus platform services business several years ago, but backed off at the last minute after realizing that commercial aviation services were poised for growth in coming years.

Now that business area is generating annual double-digit percentage growth in sales and in coming years will contribute billions of dollars of revenue that BAE is counting on to offset weak demand for ground combat vehicles and other products.

“When we look across our portfolio, the area that we get the most excited about right now is ... commercial aviation,” Hudson said, citing the company’s strong relationship with Boeing Co (BA.N) and expanded ties with General Electric Co (GE.N) and Brazil’s Embraer SA (EMBR3.SA).

Once the budget situation becomes clearer, commercial aviation is also a fertile sector for acquisitions, she said.

BAE also sees continued growth in its intelligence and security systems, in managing infrastructure for the governments, and in maintaining and repairing existing weapons, which will have to keep running longer now.

And even though BAE expects sales of ground combat vehicles to be flat in coming years after years of sharp growth fueled by the wars in Iraq and Afghanistan, they still contribute about $4 billion to the company’s overall revenue, she said.