* BAE says EPS to take a 3 pence hit if deal not reached by Feb. 21
* Previously said "modest growth" for 2012 dependent on Saudi deal
* Shares down 1 pct
LONDON, Dec 19 (Reuters) - Britain's BAE Systems warned that its 2012 earnings could take a hit should it not reach an agreement with Saudi Arabia on the pricing of a key contract in the next two months, potentially hampering growth.
The arms maker, Europe's largest defence contractor, is hunting for growth as a standalone company after failing to complete a $45 billion merger with the Franco-German maker of Airbus civilian jets, EADS, in October.
BAE said on Wednesday that it continued to be in discussions with Saudi Arabia over the pricing of a contract to supply 72 Typhoon aircraft which was signed in 2007. The Salam deal, as it is known, is worth around 4.5 billion pounds ($7 billion).
"Should an acceptable agreement not be reached before the group's full year results announcement, the impact on 2012 trading guidance would be to reduce the Group's underlying earnings per share (EPS) by approximately 3 pence per share," the company said in a statement.
BAE in August forecast that it would deliver "modest growth" for 2012 subject to agreeing the deal with Saudi Arabia, which chief executive Ian King had said he expected in the second half of the year.
Analysts currently expect the company, which is due to report results on Feb. 21, to post EPS of 40.3 pence according to a Thomson Reuters I/B/E/S poll, compared with the 37 pence EPS it reported in 2011.
"Acceptable pricing terms remain the Group's driver to such an agreement, not the timing of the settlement," the group said on Wednesday.
Shares in BAE traded down 1 percent to 342.5 pence at 1510 GMT.
Negotiations on other contracts with Saudi Arabia to provide the country with support and supply related equipment for a five year period were well advanced and are expected to be signed before the end of this year, the company said.
Of the 72 aircraft ordered under the Salam deal, 24 have been delivered to the Royal Saudi Air Force.
"It's a deferral rather than a cancellation. It just means that it (Salam payments) doesn't come into the 2012 numbers, it will be in the 2013 numbers," Societe General analyst Zafar Khan said.