LOWER military spending in the UK and US has been blamed for an expected fall in profit at aerospace giant BAE Systems.

The firm, which employs East Lancashire workers at its site in Samlesbury and Warton, saw operating profit in the first six months of the year fall to £689m – down £63m compared to the first half of 2013.

Sales also fell 10 per cent to £7.6 billion in the same period, the defence group announced yesterday, although earnings remain in line with expectations.

Chief executive Ian King said: “We continue to see a high level of activity in international markets, including from our substantial presence in Saudi Arabia, while the US and UK environments remain more constrained.”

Mr King said the group continues to perform well, and has a large order backlog of almost £40 billion.

He said: “Sales are anticipated to be weighted towards the second half of 2014, including the timing of Typhoon aircraft deliveries.

“We are finalising a further £1.3bn of international orders and are at an advanced stage of negotiations on a further £1bn of UK naval contracts.

“Excluding the impact of exchange translation, the group remains on track to deliver earnings in line with our expectations for the full year.”