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EADS profit almost doubles

Airbus maker lifts full-year forecast as jetliner unit increases output and prices

Gulf News

London: EADS almost doubled first-half profit and lifted its full-year forecast as the Airbus jetliner unit increased output and prices after racking up a record backlog.

Europe’s leading aerospace and defence company rose as much as 8 per cent in Paris after saying earnings before interest and tax jumped to 1.4 billion euros from 723 million euros a year earlier, excluding one-time charges and currency movements. Revenue added 14 per cent to almost 25 billion euros.

“These are good figures, driven by Airbus deliveries and pricing and also by Eurocopter, where margins are impressive,” said Yan Derocles, an analyst at Oddo Securities in Paris who had forecast a comparable Ebit figure of 1.1 billion euros.

EADS lifted its estimate for full-year earnings from at least 2.5 billion euros to 2.7 billion euros, even after posting a charge of 124 million euros against a three-month delay to the A350 wide-body airliner, together with a further 23 million-euro expense for fixing a wing fault on the flagship A380. Derocles said the one-time costs are in line with analyst forecasts.

Shares of EADS rose 2.28 euros to 30.49 euros, the sharpest gain since March 8, and were trading 7.4 per cent higher at 30.31 euros as of 9:06 a.m. in the French capital. They’ve added 25 per cent this year, valuing the company at 25 billion euros. Boeing Co. has advanced 2 per cent for a value of $56 billion.

Delivery Target

Airbus, which generates about two-third of EADS revenue, should deliver 580 aircraft this year, 10 more than previously projected, with order intake outpacing handovers.

“Our key programs, particularly at Airbus, continue to command our utmost attention,” Chief Executive Officer Tom Enders, presenting his first results as head of Toulouse, France-based EADS, said in the release. “On A350 especially, maturity of sections delivered to the final assembly is of key importance to us as we prepare for a robust production ramp-up.”

The delay to the A350, which stems from problems in piecing together the composite wings, means service entry will slip to the second half of 2014, EADS said. Drilling on the wings, previously due to have automated, is still being done by hand.

“The A350 remains a challenging programme and any further delays would lead to higher rates of charges,” EADS said, adding that assembly of the first example to fly will start in October, with the plane taking to the air in June or July next year.

A380, A400M

While Airbus will deliver 30 A380 superjumbos this year, the number will fall below that level in 2013, Enders said, adding that he doubts the model will reach its target of 30 orders in the current 12 months.

Airbus’s A400M military transport plane will reach operational capability latest than planned after certification testing was halted because of glitches with its engines, the company said. The turboprop power-plants are built by Rolls- Royce Holdings Plc, MTU Aero Engines Holding AG, Safran SA.

First-half net income rose to 594 million euros, or 73 cents a share, from 109 million euros, or 13 cents, a year earlier, the company said. Six analysts surveyed by Bloomberg News had estimated a figure of 497 million euros.

Annual earnings should now amount to 1.95 euros a share, excluding items, versus previous guidance of more than 1.85 euros. EADS raised its full-year earning guidance two days after Chicago-based Boeing boosted its full-year profit forecast.

The European company is benefitting from currency fluctuations after the euro slumped to $1.21 on July 24 from a 2012 high of $1.35 in February. Airbus books most of its sales in dollars and the bulk of costs in euros, though the immediate benefit of favorable movements is damped by currency hedges.