BAE Systems announces preliminary 2012 financial results amid sequestration uncertainty

BAE Systems announced its preliminary results for 2012 on 21 February, with figures indicating a 7% drop in sales and profits also falling 6% to GBP1.8 billion (USD2.7 billion).

Sales for 2012 totalled GBP17.8 billion, a decline from GBP19.1 billion in 2011. The company reported that this figure was offset by the continuing negotiations on the re-pricing of the Saudi contract for Eurofighter Typhoon aircraft.

The negotiations, expected to be concluded in time for deliveries of the remaining 48 aircraft to commence in May, will contribute to an expected 25% increase in sales by the company's UK Platform and Services division in 2013 should they be completed on schedule.

Other significant orders the company booked throughout the year included the purchase of Hawk and Typhoon aircraft by Oman in December. The contract, valued at GBP2.5 billion, will see Oman procure 12 Typhoon and eight Hawk aircraft, along with associated support and training.

Prospects in the United States remained "constrained", according to the company's announcement, with US forces withdrawing from Iraq and Afghanistan combining with the uncertainty surrounding the US defence budget due to the presidential election in 2012 and the ongoing threat of sequestration.