Super jumbo troubles hit EADS profits

14th May 2010, Comments 0 comments

European aerospace group EADS on Friday reported a 39 percent slide in first quarter net earnings that it said reflected problems with its A380 super jumbo.

EADS, which controls aircraft manufacturer Airbus, said profit in the first three months fell to 103 million euros (129 million dollars) from the same period of 2009.

Airbus operating profit plunged 92 percent in the period.

But EADS shares rose 2.22 percent to 15.87 euros in morning trading in Paris on an overall market that was down 2.35 percent on eurozone debt worries.

Analysts said the results were in line with market expectations, which cheered investors who also welcomed news that the value of orders received by EADS in the first quarter rose to 14.4 billion euros from 9.3 billion a year earlier.

Nonetheless, Hans-Peter Ring, European Aeronautic Defence and Space company finance director, told a telephone conference: "The A380 continues to weigh on our profits."

Development of the world's largest civilian airliner has been plagued by manufacturing problems and a production cycle that has proved to be more complex and costly than had been foreseen.

Ring said Airbus hoped to deliver at least 20 A380s to customers this year. Only 10 were delivered in 2009, down from 12 in 2008 and below the company target.

"The key priority this year is to deliver on our programmes," said EADS chief executive Louis Gallois in a statement.

"We need to progress with the A380, to finalise the contract amendment with customer nations on the A400M while moving forward on the technical side and to step up the development of the A350."

The A400M is a military transport aircraft, which has also encountered development delays. The A350 is a planned long-haul plane.

EADS sales rose to 9.0 billion euros from 8.5 billion in first quarter 2009.

The company said the value of its order book came to 416 billion euros, which it described as a "solid platform for future deliveries".

Gallois said that while the global economy appeared to be recovering, "recent turbulence on the financial markets reminds us that the crisis is not fully behind us."

"Volatility is still high due to the weakness of some eurozone economies."

© 2010 AFP

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