LONDON Oct 10 British defence contractor BAE
Systems said its earnings could be hit by 6-7 pence per
share should it fail to reach agreement on a jet deal with Saudi
Arabia this year.
The group, however, said it was still assuming the deal
would be completed, enabling it to maintain its outlook.
It anticipates double-digit growth in underlying earnings
per share for 2013 on expectations that it agrees pricing with
Saudi Arabia over the purchase of 72 Eurofighter Typhoon jets.
"However, should negotiations extend beyond the year end,
earnings per share for 2013 would be impacted by approximately 6
to 7 pence," it said on Thursday.
The company, which otherwise said it was trading in line
with its expectations, has been locked in pricing negotiations
with Saudi Arabia over the purchase of the Eurofighter Typhoon
jets and said on Aug. 1 that it expected the long-awaited deal
to complete in the second half of this year.
The so-called Salam deal was signed in 2007 and is said to
be worth about 4.5 billion pounds ($7.17 billion). BAE builds
the Eurofighter alongside European aerospace group EADS
and Italian defence contractor Finmeccanica
BAE said the government shutdown in the United States had
not made any material impact to its overall financial
performance but expected its U.S. operations to be hit should it
not be resolved.
Since the shutdown on Oct. 1, about 1,200 employees from its
intelligence & security and support business have been
temporarily told not to report to work, it said.
It also said discussions with the Ministry of Defence about
the future of its major shipyards in Britain were continuing,
and it was also in talks with the government about potential
changes to the contract for the Queen Elizabeth Class aircraft
In international markets, where it has stepped up its
efforts to counter reduced spending in the U.S. and Europe, BAE
said it had achieved 5 billion pounds of non-US and UK orders in
the year to date, and it was continuing to pursue multiple
opportunities, including prospects in he United Arab Emirates
It had so far purchased 34 million shares for 134 million
pounds under a 1 billion pound share buyback program that it
launched in February, whose full implementation is subject to
the conclusion of the Salam deal.
Shares in BAE Systems were trading down 0.2 percent at 438.6
pence at 0706 GMT.