BAE profits in decline after budget cuts
BAE Systems yesterday reported a seven per cent fall in full year profits as US and UK military budgets were slashed.
Europe’s largest military contractor saw revenues slip by 14 per cent last year and forecast flat sales for 2012.
Among the problems hitting the company was the US army cutting supply orders following its pullout from Iraq and after the delay of an order for 72 Eurofighter Typhoon jets by Saudi Arabia.
BAE posted underlying earnings before interest, tax and amortisation (EBITA) of £2.02bn for the year to the end of December 2011.
The company increased the total dividend 7.4 per cent to 18.8p. Chief executive Ian King said: “BAE Systems is operating in a difficult business environment as defence spending reduces in its largest markets, the US and UK. Whilst little sales growth can be expected for the group in 2012 in the current market conditions, modest growth in underlying earnings per share is anticipated.”
BAE generates 47 per cent of its revenues from the US and 29 per cent from Britain.
“It looks like it will be a long, hard slog ahead for the company,” said Société Générale analyst Zafar Khan.