European aerospace and defence firm BAE Systems has announced the shock resignation of its chief executive, denting the share price at a time when the group is battling to revive flagging profits.
BAE, Europe's biggest aerospace firm by market value and second by turnover, said Mr John Weston had quit "to pursue other interests" after four years at the helm and would be replaced by chief operating officer Mr Michael Turner.
BAE said it was trading in line with the guidance it last gave to the market, but it declined to discuss the reason behind Mr Weston's immediate departure, leaving investors to speculate that the move signalled some hidden problems.
BAE shares were down 4 per cent at 331p in late morning trade. The stock has outperformed the broader FTSE Eurotop 300 index of Europe's leading shares by about 15 per cent over the last year.
Industry analysts expect BAE to win lucrative military orders as the US government makes national security as a top priority in the wake of the September 11th attacks, but the airline recession has taken its toll on group profits. Before exceptional items, interest and goodwill, group profits more than halved in 2001.
An analyst in London said such resignations tended to imply problems with a contract or on a company strategic decision.
BAE, which employs over 100,000 staff and is the fifth largest military supplier to the Pentagon, cut 3,700 jobs last year on the back of a fall in military orders and the crisis in the civil aviation industry.