BAE Systems highlights uncertainties in key US market US sales account for nearly half of BAE's revenue. "Uncertainty as to how US federal deficit reduction will be implemented, including possible sequestration measures, continues to cloud the outlook for the US government defence budget," BAE said. There are fears that US economy could fall off a "fiscal cliff" next year when the George W Bush-era tax cuts expire at the same time taht $109bn in spending cuts are introduced to tackle with the country's debt. The group said in the update that it expected modest growth in overall underlying earnings per share for 2012, assuming satisfactory pricing talks this year with the Saudi government on the Typhoon Salam programme to supply the kingdom with Eurofighter jets. Some analysts and investors believe it has left the defence giant more vulnerable to a takeover bid or even a break-up. One major BAE shareholder told The Daily Telegraph the company was now "a sitting duck." BAE are in a precarious position. They have spent the last few weeks persuading people that they had to diversify their revenue stream away from defence in order to compete. Now, they have to come up with a reason why they don't," the investor said. In a broker's note on Thursday, Andrew Gollan of Investec said: "Following collapse of the EADS talks, BAE's interim management statement is uncontroversial." He said: "Trading has been consistent with expectations and full-year guidance is reconfirmed subject to conclusion of the negotiations on the Saudi Typhoon contract, of which the company appears confident. As for all defence companies, uncertainty in the US market presents a risk over the coming months. We see little opportunity for the rating to push on materially from here near term. He has reduced the price target on the company to 325p and moved from a sell rating to a hold. EADS backs Enders On Thursday, the board of EADS gave its backing to Tom Enders, the EADS chief executive. "The board expressed strong support for Tom Enders and his team and encouraged him to continue on his track," a spokesman said. Separately, Mr Enders, who is German, told staff in a letter that he underestimated political opposition to the merger, Bloomberg reports. Angela Merkel, the German Chancellor, is reported to have personally blocked the tie-up. He wrote: "I'm ready to admit that we never expected to face such opposition against the deal, in particular not in Berlin." EADS shares fell 1.1pc in early trading on Thursday.