EADS profits rocket

9th May 2005, Comments 0 comments

PARIS, May 9 (AFP) - EADS, the giant European aeronautics group which owns most of Airbus, reported rocketing profits on Monday and said it was on track for full-year targets.

PARIS, May 9 (AFP) - EADS, the giant European aeronautics group which owns most of Airbus, reported rocketing profits on Monday and said it was on track for full-year targets.  

Net first-quarter profit shot up 569 percent helped by a one-third increase in airliners delivered, in contrast to the performance of main rival Boeing.  

The speed of the profits rise surprised analysts and shares in the European Aeronautic Defence and Space Company rose slightly.  

However, the results were overhung by uncertainty about impending top management changes.  

Airbus has invested massively in recent years in development of its A380 superjumbo airliner, which began test flights two weeks ago.  

Analysts said that a reduction of development spending had also helped profits, as had favourable currency factors. But the group warned that these might turn against later this year.  

The outgoing joint chairmen Philippe Camus and Rainer Hertrich said that the results were in line with targets from growth of EBIT earnings and of sales for 2005.  

The head of Airbus, Noel Forgeard is to be named on Wednesday joint chairman of EADS but his successor at Airbus has yet to be named.  

EADS, which owns 80 percent of Airbus, said net profit had risen on a 12-month comparison to EUR 328 million (USD 419.84 million) from EUR 49 million in the first quarter of last year.  

"The first-quarter results confirm our 2005 targets for EBIT (earnings before interest and tax) and revenue growth," Camus and Hertrich said in a statement. The company said profits grew in all divisions, especially Airbus, and defence revenues were up 16 percent.  

This worked out at EUR 0.41 per share from EUR 0.06 per share. The results were considerably stronger than analysts had expected and the price of shares in the group was showing a gain of 0.57 percent to 22.84 at midday Monday.  

Market analysts said that EADS had benefited from successful currency hedging against weakness of the dollar, and a reduction of research and development costs.  

Airbus alone raised its EBIT earnings by 180 percent to EUR 628 million from sales which rose by 21.0 percent to EUR 4.99 billion.  

Analysts had forecast an EBIT range of EUR 410 – EUR 535 million, and most of them had expected a figure at the lower end.  

In comparison, rival American aircraft maker Boeing posted a 14-percent drop in net profit in the first quarter of the current year, due to charges and also a 5.0-percent decline in commercial airliner sales.  

Airbus had delivered 87 aircraft in the first quarter from 67 in the same period of last year, and took 123 orders in the first quarter, representing a 66-percent market share.   

However, EBIT earnings by Airbus were likely to be affected by unfavourable exchange rate factors in the next few quarters, EADS said.  

The division manufacturing military transport aircraft reduced an operating loss from EUR 8 million to EUR 6 million and sales rose by 7.0 percent to EUR 108 million.  

Overall EADS operating profit before write-downs for goodwill and exceptional items, or earnings before interest and tax, more than tripled to EUR 657 million from EUR 198 million. Sales rose by 16.0 percent to EUR 7 billion.  

The value of orders taken in the first quarter amounted to EUR 9 billion from EUR 3.4 billion, taking the total value of the order book to EUR 190.4 million at the end of March. Of this, EUR 49.7 billion had been booked by the defence divisions.  

The amount of net short-term liquidity available rose to EUR 4.3 billion from EUR 4.1 billion 12 months earlier.  

The group expects to raise EBIT earnings this year by 6.0 percent to EUR 2.6 billion from sales of EUR 33 billion, on a predicated average exchange rate of USD 1.30 for EUR 1.  

EADS said it expected to deliver 350-360 Airbus airliners in 2005, having delivered 320 last year.  

All divisions had increased operating profits in the first quarter, it said.  

EBIT earnings at the aeronautics division increased 10.0 percent to EUR 11 million on sales of EUR 743 million, up 15.0 percent due to helicopter sales at wholly owned subsidiary Eurocopter.


Subject: French News

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