BAE Systems reported a sharp fall in profits today as it revealed the impact of further defence spending cuts in the United States.
The company, which employs around 11,000 people in Warton and Samlesbury, is also braced for another decline in earnings this year but said an order backlog worth £42.7 billion meant it was well placed in the medium term.
However, pre-tax profits fell from £1.2bn in 2012 to £422m. That meant net profit for last year fell to £176m million from £959m a year earlier.
Sales were two per cent higher at £18.2 billion.
The guidance for this year sent BAE shares down by more than 10 per cent and offset yesterday’s announcement about new price terms with Saudi Arabia over the sale of 72 Eurofighter Typhoon jets.
Engines giant Rolls-Royce made a similar announcement last week when it said revenues will fail to grow this year for the first time in a decade.
The US government shutdown late last year saw more than 1,000 US intelligence, security and support staff sitting idle as Washington politicians squabbled over the budget.
Chief executive Ian King said: “Overall, the group delivered a solid performance in 2013, against the background of reduced government spending and challenging market conditions.”
He added that a focus on costs and competitiveness protected margins across the majority of the business.