BAE Systems warns over US government shutdown

Typhoon jet BAE Systems makes the Typhoon fighter jet

Related Stories

UK aerospace company BAE Systems has said its US operations could be hit if the government shutdown in Washington turns out to be protracted.

BAE said its financial performance had not been materially affected since the budget dispute began on 1 October.

However, 1,200 of its intelligence, security and support staff have been told not to report for work.

The crisis began after Republicans who control the House of Representatives refused to approve a budget.

At the same time, the Republicans have refused to approve an increase in the US debt limit unless it is accompanied by significant spending cuts and other policy concessions.

Republican leaders have called on President Barack Obama to open negotiations over ending the impasses.

However, Mr Obama has accused them of using "extortion" by calling for his healthcare reform law to be delayed or stripped of funding.

BAE is also facing longer-term difficulties in the US, where it derives 40% of its revenues, because of plans to reduce the country's defence budget by $487bn (£320bn) over the next decade.

At the same time, its deal to supply Saudi Arabia with 72 Typhoon jet fighters has hit trouble, following disagreements over the final contract price.

In its latest interim management statement, BAE said its earnings could be hit by 6p to 7p a share if it failed to conclude negotiations on the Saudi deal by the end of 2013.

However, the firm added that it expected a "satisfactory conclusion" to the talks, allowing it to deliver "double-digit growth in underlying earnings per share".

The company has been under pressure to develop an alternative growth strategy following the collapse of its planned merger with European defence company EADS in 2012.

More on This Story

Related Stories

The BBC is not responsible for the content of external Internet sites

More Business stories

RSS

BBC Business Live

  1.  
    VIRGIN AUSTRALIA 06:49:
    Virgin planes

    Virgin Australia overnight announced losses of A$355.6m (£200.5m) for the year - more than three times its loss last time. It blamed "weak consumer sentiment" and too many planes - like its rival Qantas which reported its results yesterday.

     
  2.  
    CO-OP VOTE 06:35: BBC Radio 4

    Big changes to the structure of the deeply troubled Co-op group will be put to a ballot of members tomorrow. Phil Dorrell, of consultants Retail Remedy, tells Today that even if the changes go through, a new leadership will have lot of work to do. "This will be a large step-change. My one concern would be that it probably shouldn't be the final change for the Co-op, they should consolidate, make sure they get their businesses back on track, and then have another look at it in a couple of years time."

     
  3.  
    EUROZONE ECONOMY 06:22: Radio 5 live

    Wake Up to Money ponders whither the eurozone? This week France had to re-appoint its cabinet because of its failing economy. Italy re-entered recession earlier this month and even German GDP was down slightly in the latest quarter. Kathleen Brooks, from Forex.com tells the programme: "Some economies are falling at a faster rate than others but what we've really seen is the core economies Germany and France lagging behind Spain."

     
  4.  
    HOUSE PRICES 06:14:
    For Sale signs

    The gap between house sellers' asking prices and actual selling prices is widening, says the property website Hometrack. It explains that the market is cooling down, at least in terms of prices. It says sellers in England and Wales typically got 96% of their asking price in August, falling back for the third month in a row. But it adds house prices only tend to start falling when the percentage of the asking price that sellers achieve falls below 94%.

     
  5.  
    GOOGLE DRONE 06:03:
    Google drone

    Overnight, Google said it was developing drones to act as flying delivery vehicles. The company calls it Project Wing. But it said it would take many years to create a service with lots of drones making lots of deliveries every day. More here.

     
  6.  
    06:00: Rebecca Marston Business reporter, BBC News

    All of that. Stay with us - we're here 'til 13:00.

     
  7.  
    06:00: Ian Pollock Business reporter, BBC News

    Good morning, we are here again, to keep you informed, educated and possibly entertained.

     

Features

  • A painting of the White House on fire by Tom FreemanFinders keepers

    The odd objects looted by the British from Washington in 1814


  • Chris and Regina Catrambone with their daughter Maria LuisaSOS

    The millionaires who rescue people at sea


  • Plane7 days quiz

    What unusual offence got a Frenchman thrown off a plane?


  • Children testing a bridge at a model-making summer school in Crawley, West SussexSeeding science Watch

    The retired professor who turned village children into engineers


BBC © 2014 The BBC is not responsible for the content of external sites. Read more.

This page is best viewed in an up-to-date web browser with style sheets (CSS) enabled. While you will be able to view the content of this page in your current browser, you will not be able to get the full visual experience. Please consider upgrading your browser software or enabling style sheets (CSS) if you are able to do so.