EADS predicts profits leap in 2004

8th January 2004, Comments 0 comments

PARIS, Jan 8 (AFP) - The European Aeronautic, Defence and Space company EADS said Thursday it foresaw a 20-percent jump in operating profit this year and stable sales compared with 2003.

PARIS, Jan 8 (AFP) - The European Aeronautic, Defence and Space company EADS said Thursday it foresaw a 20-percent jump in operating profit this year and stable sales compared with 2003.

Operating profit at EADS came to EUR 1.4 billion (USD 1.8 billion).

The company based its 2004 forecast on gains in its space and military divisions but said it also took account of an expected decline in sales of Airbus civilian aircraft.

The news left investors skeptical and EADS shares were down 0.66 percent to EUR 18.03 in mid-day trade on a generally stronger market here.

While the space unit was expected to turn a profit this year thanks to a restructuring, Airbus is seen as sustaining a "slight decline" in aircraft deliveries.

"The air transport industry is recovering slowly but remains under pressure," said co-chief executives Philippe Camus and Rainer Hertrich in a statement. An authentic recovery in the sector is not expected before 2005.

Airbus, of which EADS controls 80 percent, foresees sales of nearly 300 aircraft this year. The manufacturer said last month it had reached its target to sell 300 planes in 2003, beating rival Boeing for the first time. Boeing delivered 281 aircraft last year.

Airbus had earlier predicted deliveries of slightly more than 300 craft in 2004.

EADS said its defence activities, where sales are expected to rise 20 percent, should compensate for the anticpated slide in Airbus sales, which it partially attributed to the effects of a weak dollar.

At the same time, the group expects a pickup in deliveries of missiles, Tiger and NH90 helicopters, the Eurofighter combat aircraft as well as an increase in revenues from development of the A400M military transporter.

But the persistent weakness of the dollar is a continuing source of concern at EADS.

Its projection of stable sales is based on an assumption the euro will be worth USD1.20 this year against 1.10 for 2003. The single currency is currently trading above USD 1.25.

EADS, which will publish its 2003 results in March 8, predicts an operating profit of
EUR 1.4 billion and sales of between EUR 29 billion and EUR 30 billion.

© AFP

                                Subject: France news

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