ATW Daily News

'Encouraging' first quarter for rebounding EADS, Airbus

Thursday May 15, 2008

The A380 delivery delays announced this week by Airbus belie the more fundamental turnaround at the aircraft manufacturer and parent EADS, which yesterday credited its "remarkable order intake" for its return to the black.

The aerospace giant posted a €285 million ($441.9 million) profit in the first quarter, reversed from a €10 million loss in the first three months of 2007. "Though many serious challenges have been overcome, there remains much to do in order to secure the significant and lasting improvement in operational performance we are targeting. But the first-quarter results are encouraging in that respect," CEO Louis Gallois said in a statement.

Group revenue climbed 10% to €9.85 billion and EADS' operating profit soared to €769 million from €88 million in the year-ago period. Its order book was worth $351.5 billion at quarter's close, up 4% year-over-year.

EBIT at Airbus swung to a €628 million profit from a €69 million loss that was the result of "exceptional restructuring charges" as revenue climbed 7% to €7.06 billion. "The higher EBIT came despite the pressure resulting from loss-making contract provisions and price deterioration in aircraft delivered compared to the same period of the previous year. Supporting impact came from an excellent delivery performance for single-aisle and A330 aircraft," it said.

Airbus's overall order book rose 3% to €291.12 billion as it took in €31.5 billion worth of orders (395 net, 420 gross) last quarter, up significantly from €5.46 billion in the 2007 first quarter. It booked a net 290 A320 family aircraft, 102 A330s/A340s and three A380s as well as 64 commitments for the A350 XWB. It delivered 123 aircraft during the quarter, up 7%, including two A380s to Singapore Airlines, and executives told reporters yesterday at a Toulouse briefing that the 48 deliveries in March were a company record for a single month.

Looking ahead, EADS is sticking to its full-year guidance of a €1.8 billion EBIT, assuming an exchange rate of $1.45 to €1, on more than €40 billion in revenue. Airbus expects to book more than 700 aircraft orders this year. It confirmed that "any potential financial impact of the new A380 delivery schedule has not been determined so far."

by Brian Straus

Other headlines: