BAE Systems posts falling annual profits
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LONDON, Feb 21 AFP
February 22 2013, 05:44AM
British arms maker BAE Systems says stretched defence budgets have weighed on the group's profits in 2012 and warned fresh cutbacks could force it to axe 3,500 jobs at US shipyard operations.
Net profits dropped 14 per cent to STG1.07 billion ($A1.60 billion) last year, compared with 2011, BAE said in a results statement on Thursday.
Revenues slid seven per cent to STG17.83 billion in 2012 compared with a year earlier, as the British and US governments tightened their defence budgets amid global economic strains.
BAE briefly mentioned the collapse of last year's mega-merger with European aviation giant EADS, noting it would have been an "exciting development" but adding no "acceptable" agreement to all parties could be found.
"Following a period of growth, defence budgets in the US have flattened and are expected to remain constrained in response to reducing overseas operations and measures to address federal deficits," BAE said.
"In the UK, the defence market has stabilised following changes to program priorities outlined in 2010 through the UK government's Strategic Defence and Security Review."
BAE added that "the overall outlook in both countries is expected to continue to be constrained".
And the company warned it could slash 3,500 jobs at its US ship repair operations after the US Navy served notice on a number of maintenance requirements amid uncertainty over US budget talks.
"BAE Systems has been informed by the US Navy of its 'intent to cancel' a number of ship maintenance availabilities if current and long-term budget negotiations are not resolved between Congress and the White House," it said in a separate statement.
The company also announced it would repurchase up to STG1.0 billion worth of its shares over three years.