Dollar fall drags EADS into loss: firm

13th May 2011, Comments 0 comments

European aerospace giant EADS said on Friday that weakness of the dollar had tipped it into a net loss in the first quarter but stood by its targets for the year.

EADS said its aircraft subsidiary Airbus expected to increase production, pulled by growth in the global airline market.

EADS reported that it made a net loss of 12.0 million euros ($17.0 million) compared to a profit of 103 million euros in the first quarter of last year.

The European Aeronautic Defence and Space Company said that the outcome reflected variations in the value of the dollar.

The price of shares in the company rose by 3.60 percent to 22.60 euros because analysts focused on the strong outlook for the sector and activity by Airbus.

EADS and Airbus sell much of their production in dollars but a high part of their costs is in euros. When the dollar falls, there is a big negative impact on the group's accounts.

EADS said it still expected sales for the year to exceed last year's figure and to achieve a steady earnings before interest and tax of about 1.3 billion euros.

The effects of the earthquake disaster in Japan and civil unrest in North Africa should have only a temporary effect on airline activity, it added. jmi/hd/boc

© 2011 AFP

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