BAE warns on Saudi delays

The group said it is still assuming the deal will 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 7p,” 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 August 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 £4.5bn. BAE builds the Eurofighter alongside European aerospace group EADS and Italian defence contractor Finmeccanica.

BAE said the government shut down in the United States had not made any material impact to its overall financial performance but expected its US operations to be hit should it not be resolved.

Since the shut down on October 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 carriers.