BAE Systems struggles to beat 2010

12th Oct 2011 07:19

BAE Systems, the UK defence contractor, says earnings for 2011 will be broadly in line with those of 2010.This will not necessarily please shareholders but the group says constraints on government expenditure are affecting many of its keys markets.Cost reductions will continue to be the order of the day following the announcement of 3,000 job losses in the UK because of a slow down in production of the Typhoon aircraft.In August, as one of two successful bidders, BAE Systems, together with Northrop Grumman, was awarded a $450m (£289m) contract to develop the US Army's Ground Combat Vehicle programme. This contract win is being challenged by BAE's rival, Science Applications International Corporation (SAIC).It also faces a challenge from the incumbent firm after winning an $850m contract to operate and maintain the Radford Army ammunition plant in the US. BAE's share buy back programme continues: as of the 11th of October, 112 million shares had been repurchased at an aggregate cost of £303m. The firm has also waded in to the debt markets raising $1.25bn in the US bond market in October.BAE continues discussions regarding the possible sale of Typhoon aircraft to the Sultanate of Oman while the Indian Air Force is also considering a purchase of the aircraft. BS