Defense technology company Qinetiq is reflecting uncertainty in its two key markets, the UK and the U.S.A., warning it is now unlikely to meet its financial expectations for the year.

Announcing its first-half results, Qinetiq cautions that its “main geographic markets are experiencing short term uncertainties in specific areas. In the UK, political and economic factors are delaying the letting of contracts; in the US, the finalisation of policy for Afghanistan continues to impact Government decision-making.”

Qinetiq recorded a pre-tax loss of £1.3 million ($2.17 million) for the six months to September 30, compared to a profit of £36.6 million for the same period in 2008. The loss is attributed to exceptional costs.

Revenue for the period was up 11% at £806.3 million. This figure, however, also reflected the strengthening dollar compared to the pound.

Indicative of wider industry concern was the 21% reduction in research revenues secured from the UK Defense Ministry by Qinetiq compared to the same period for 2008.

The UK defense and aerospace sector is increasingly vocal over cuts in government research and technology funding.