Revenue in the year to end-December rose 5.5% to £19.3bn but increased finance costs meant pre-tax profits dropped 1.8% to £1.6bn.
The FTSE 100 military planes, warships, vehicles and electronics group added that current orders had also dipped slightly compared to the end of 2019 at £36.3bn (37.2bn).
BAE also restored the 2019 final dividend suspended at the start of the year when the impact of the pandemic was unclear and raised the payment for 2020 by 2% to 23.7p.
Charles Woodburn, chief executive, said it was a strong set of numbers against a challenging backdrop.
For 2021, BAE expects sales to grow at between 3-5% with underlying profits to rise by 6-8%.
Air and electronic systems will offset the weakness in commercial aircraft, it said, with approximately 80% of expected sales already in the order backlog.
Net debt increased to £2,72bn, following the £1bn bond issuance to fund the UK pension scheme, and the $2.2bn (£1.7bn) acquisitions of the Airborne Tactical Radios and Military Global Positioning System businesses.