BAE Systems on track but awaits US defence cuts

FTSE 100-listed BAE Systems has maintained its outlook for the year and yesterday forecast modest growth in earnings per share for 2013, subject to uncertainties over defence budget cuts in the United States.

The defence firm said that its outlook excluded any benefits from the share buyback programme launched in February and did not include a potential three pence per share earnings uplift should the company conclude pricing talks with Saudi Arabia on a fighter jet contract.

“BAE Systems has continued to perform in line with management expectations announced at the preliminary results in February,” said chief executive Ian King.

“We continue to pursue growth in our international markets and have built on the strong international order intake in 2012 with a further £2.3bn of non-UK/US orders received in the year to date, reflecting the strength of our broad based and diverse business.”

BAE is searching for new avenues of growth after the collapse of its $45bn (£28.9bn) merger with Franco-German aerospace group EADS and has focused on markets such as the Middle East. It said that its 2013 forecast does not reflect the impact of US defence spending cuts because it does not have sufficient detail.

Chairman Dick Olver survived a shareholder vote at yesterday’s annual meeting, keeping his job despite calls for his resignation following the collapse of the EADS merger.

Olver had been due to leave in May 2014, but BAE has said he may leave before then and has hired a headhunter to look for a replacement.