LONDON, Feb 23 (Reuters) - Britain's BAE Systems said it expected increased defence budgets to boost its earnings by 5-10 percent this year after it met market expectations with a 7 percent rise in 2016.
The company reported underlying earnings per share of 40.3 pence on sales up 1.1 billion pounds to 19 billion pounds ($23.6 billion), with the better-than-expected rise mainly coming from foreign exchange benefits.
Chief Executive Ian King, who will retire at the end of June, said 2016 was a good year for BAE Systems.
"With an improved outlook for defence budgets in a number of our markets, we are well placed to continue to generate attractive returns for shareholders," he said on Thursday.
($1 = 0.8043 pounds) (Reporting by Paul Sandle; editing by Kate Holton)