BAE warns of uncertainty in US budgets

Elizabeth Fournier
BAE SYSTEMS has warned that flooding in the US and “significant uncertainty” over future levels of military spending may disrupt short-term trading, but it remained confident of winning further contracts despite a squeeze in government budgets.

The world’s second biggest defence contractor said trading for the three months from 1 July had been in line with expectations and earnings per share for the year will be “broadly similar” to 2010.

BAE, which announced last month that it will cut around 3,000 jobs across the UK due to slower sales of the Eurofighter jet, said: “[W]ith constraints on government expenditure in many of the group’s principal markets, affordability continues to be a key focus for customers.”

The group, which makes the Typoon aircraft as part of a four-nation consortium including France’s EADS, delivered its first 24 Typhoon to the Royal Saudi Air Force in the period.

It said it was “pursuing a number of significant business opportunities” including the possible sale of a Typhoon aircraft to India as well as the Sultanate of Oman.

BAE warned it is also “assessing the implications of serious flood damage” an electronics facility on the US east coast, which could lead to some sales being deferred to 2012.