BAE sees modest hit from UK military spending cuts

LONDON (AP) — Defense contractor BAE Systems PLC said Thursday that the British government's military spending cuts are expected to knock about 2 percent off underlying earnings, though details of the reductions are still to be worked out.

BAE said its earnings would be hit by the early retirement of the Royal Air Force Harrier jet fleet, and might also suffer from the decision to cancel the Nimrod MRA4 reconnaissance plane.

The government had ordered 21 of the new Nimrods from BAE in 1996, but the order had been cut to nine. The first production aircraft made its maiden flight last year; one other has been completed and seven more are in various stages of production, BAE …