Airbus parent EADS reports narrow Q3 profit

[November 12, 2010]  PARIS (AP) -- Airbus' parent company EADS NV reported a narrow third-quarter profit on Friday, rebounding from a loss a year earlier as the commercial plane-making business continued to improve in line with the global economic recovery.

The European defense and aerospace company said net income rose to euro13 million ($18 million) in the third quarter, up from a loss of euro87 million in the same quarter of 2009. Revenues jumped 18 percent to euro11.25 billion.

Earnings before interest and tax (EBIT), a benchmark for underlying profits, jumped 88 percent to euro378 million from a year earlier. That was ahead of analysts' expectations for a far more modest rise to around euro260 million.

EADS predicted that EBIT for the year would be "at least" euro1.1 billion.

Airbus, the key rival of U.S. based-Boeing Co., has been facing recent questions about the engines on its A380 superjumbo, and EADS has also said the weak dollar compared to the euro could drag down reported profits.

For the first nine months of the year, EADS said net income was down 32 percent to euro198 million, though revenues in the period climbed 6 percent to euro31.55 billion.

"The commercial aviation sector continues its ascent which starts to be reflected in the nine-month results," EADS CEO Louis Gallois said.

Airbus, the plane-making consortium which accounts for the vast majority of EADS earnings, has started manufacturing the new A350 long-range, mid-size jet aimed to compete with Boeing's 787.

EADS is also fresh off finalizing a deal with governments of the seven launch customers for its A400M military transport plane, which stalled amid funding trouble for years.

With many European governments cutting spending as the global economic downturn thinned tax revenues, Gallois said EADS will "remain attentive to challenges which could arise for our business with government customers" -- and that the plane-making business would underpin profits.

"In the mid-term, at the current exchange rates, Airbus should significantly improve its underlying profitability thanks to better volume, pricing and further economic improvement of the A380 performance," said Gallois.

Many analysts say an engine incident on a Qantas A380 last week that led the Australian carrier and Singapore Airlines to ground nine of the planes should be more a problem for engine-maker Rolls-Royce PLC than for EADS.

London-based Rolls-Royce said Friday the incident will cause full-year profit growth to be slightly lower than previously expected.

Shares of EADS fell 0.5 percent to close at euro19 per share in Paris trading Thursday.

[Associated Press]

Copyright 2010 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.