BAE Systems Profit Drops 82% On Defence Cuts
Defence giant BAE Systems has seen its shares drop up to 9% after reporting a huge profit drop last year.
It said net profit slumped 82% last year amid large defence cuts, particularly in the US.
Profit after tax tumbled to £176m compared with £948m a year earlier.
It said it expected a further drop during 2014 of around 7.5% in its pre-tax earnings.
The fall came despite a 1.5% rise in sales to £18.18bn, with a boost coming from the price amendment for the 'Salam' Eurofighter Typhoon deal with Saudi Arabia.
The Middle Eastern country garners two-thirds of its business outside of the UK and US, at £6.4bn.
Its underlying operating profit fell by 50% to £806m, mainly on the back of an impairment charge of £865m of reducing its US business' value through government budgetary cuts.
Despite the cuts, it was able to maintain its order book at £42.7bn, flat on the 2012 figure.
BAE's best performing sector was its platforms and services UK - responsible for the Salam project - which saw revenues up 21% to £6.9bn, with earnings up 26% to £879m.
Its worst results came from the cyber and intelligence group, where revenue was down 11% to £1.2bn and earnings were down 7% to £115m.
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