BAE profits fall on delayed Saudi jet deal and US defence cuts
BAE Systems has said it hopes to made double-digit growth in full year underlying earnings on the conclusion of a Saudi jet deal after delays in price negotiations pushed its first half pre-tax profits down eight per cent to £529m (release).
Basic earnings per share fell to 12.6p from 12.8p in the same period the year before. The company was also hit by defence budget cuts in the US and Europe and has been searching for new avenues for growth.
The US Department of Defence reduced its 2013 fiscal year defence spending by $37bn and hopes to make a further $50bn annually over the next ten years.
BAE said the outlook for the UK market remains stable, with much of the group's business are concentrated on a small number of large, long-term programmes.
The company is currently in pricing negotiations over 72 Typhoon aircraft ordered by the Saudia Arabian air force in 2007 and said today it will continue to develop its Saudi business and signed in June a £1.8bn contract to provide follow-up support.
Since the failed $45bn merger attempts with EADS (to be renamed Airbus), it has been focusing on overseas exports and niche sectors like cyber security.