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UPDATE 1-BAE beats first-half earnings forecasts, says on track for the year

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LONDON, Aug 2 (Reuters) - BAE Systems reported a better-than-expected 11 percent rise in first-half earnings of 945 million pounds ($1.25 billion) on Wednesday, and said it was sticking to its full-year target despite a softening in demand in cyber & intelligence.

Chief executive Charles Woodburn, who took over from Ian King on July 1, said the performance was consistent with his expectations, and the group was well placed to benefit from an expected increase in defense budgets.

Britain's biggest defense contractor is forecasting that its underlying earnings per share this year will be 5-10 percent higher than the 40.3 pence it made in 2016.

"Whilst there is no change to the group-level earnings guidance, some softening in the top line of, and an anticipated second-half restructuring charge in, Cyber & Intelligence are expected to be offset across the rest of the business," it said.

BAE reported sales of 9.6 billion pounds, up 4 percent on a constant currency basis, in the six months to end-June, and a 14 percent rise in EPS to 19.8 pence, beating analysts forecasts of 9.1 billion pounds and 19 pence respectively. ($1 = 0.7574 pounds) (Reporting by Paul Sandle; editing by Kate Holton)