The Pentagon’s $42 billion (£27 billion) spending cuts could throw BAE Systems’ expectations for “modest growth” in earnings per share this year off course, the defence giant warned today.
BAE, which suffered the collapse of its proposed £30 billion merger with Airbus owner Eads last year, said the City’s expectations for growth were “subject to the continued uncertainties relating to US defence budgets.” Major US government cuts, known as sequestration, began in March, and will force the Pentagon to reduce its proposed spending.
But Europe’s largest defence contractor and joint developer of the Typhoon Eurofighter, pictured, added that its forecast excluded the benefit from its share buyback programme launched in February.
“BAE Systems has continued to perform in line with management expectations announced at the preliminary results in February,” chief executive Ian King said.
“We continue to pursue growth in our international markets and have built on the strong international order intake in 2012 with a further £2.3 billion of non-UK/US orders received in the year to date.”
