AMSTERDAM (Dow Jones) – European aerospace group EADS has confirmed the end of the first three months of 2010 its forecast for the full year. The Board continues to expect sales at last year’s level and a positive EBIT of EUR 1 billion. In the coming months, the focus is on the aircraft programs A380, A400M and A350. (Photo: EADS)
In the first quarter of EADS rose in a gradually brightening environment, although the sales were due to higher deliveries by 6% to EUR 8.95 billion, but not the income level of the previous year. EBIT before goodwill and exceptionals reductions, and taking into account exceptional foreign exchange was reduced by 64% to 83 million EUR. A disadvantage to the A380 program and courses have had a worse hedging. Positive effects have come from the Airbus series of programs and the space and defense businesses.
Net income fell 39% to EUR 103 million. However, the company surpassed analysts’ expectations. They had held only by consensus sales growth of 3% for possible and were considered in net profit from a decline of more than 80%.
The net result was due to exchange rate effects can be difficult to estimate, said the analysts at Landesbank Baden-Wuerttemberg the differences. Some market participants were delighted with the predictions of the underlying results, but criticized the weak outlook and especially since the proposed negative cash flow after customer financing. The share price rose to 12.50 clock by 3.4% to 16.06 EUR.
The board called the company, despite the existing challenges and continues to be "solid" set up. The daughter of Airbus is to deliver machines by the end of as many as in 2009 with 498 aircraft. In the first three months already 122 aircraft have been delivered to customers. For Bruttobestellungen the European aircraft manufacturer expects 2010 with 250 to 300 machines. Of 60 new firm orders were taken from January to March in the books. Eurocopter is expected, however, deliver some 6% less than last year with 558 helicopter engines.
The planned EBIT in the group has to the Board that in the current year are many burdens. Compared to 2009 deteriorated hedging rates would be reflected at minus EUR 1 billion and also the A380 program will provide spite of planned improvements no positive contribution. In addition, the Board anticipates lower deliveries for helicopters, an increase in research and development expenses and a cost inflation. Positive effects, the Group targets cost savings and higher sales at its civil aircraft.
With regard to the A380, the Board was more positive than before. It was being made on many fronts, and the program has stabilized rapidly, said Chief Financial Officer Hans Peter Ring in the presentation of Erstquartal numbers.
Not so satisfied, the Executive Board with the progress of the detailed negotiations Militäprogramm A400M, follow on from the recently concluded agreement. Here, the talks would take longer than expected, said the CFO.
Free cash flow before customer financing will turn out neutral in 2010 due to sustained cash receipts from the authorities and government business and other advances in the A400M program. Free cash flow is customer financing, however, "negative" in prospect.
"I am cautiously optimistic that it slowly returned to growth in our industry," said EADS CEO Louis Gallois. Economic indicators would point to a mild recovery in the global economy. This has a significant positive impact on air transport.
However, according to Gallois, the recent turmoil in financial markets show that the crisis is not yet fully overcome. "The volatility is still high, particularly given the weakness of some economies in the euro zone," said the CEO. From the resulting strengthening of the dollar, EADS is likely to benefit in the medium to long term – provided that the dollar trend would continue.
According to the analysts at Deutsche Bank, the euro’s weakness to the share price of EADS will clearly benefit. acting at the exchange rates it is the largest single profit drivers for the group, they say. The German bank is now of an euro exchange rate from $ 1.25, down $ 1.40.
-By Kirsten Bienk, Dow Jones Newswires
+49 (0)40 3574 3116, kirsten.bienk @ dowjones.com
DJG / KiB / has / dok