Airbus Q1 core profit falls 5%, confirms targets
Airbus Group posted a narrower-than-expected drop in core earnings on Tuesday, after dodging the impact of lower aircraft deliveries and higher research and development spending, and reaffirmed its financial goals for the year.business Updated: May 13, 2014 14:32 IST
Airbus Group posted a narrower-than-expected drop in core earnings on Tuesday, after dodging the impact of lower aircraft deliveries and higher research and development spending, and reaffirmed its financial goals for the year.
The world's second-largest aerospace group after US rival Boeing said first-quarter operating income before one-off items fell 4.6% to 700 million euros ($963 million) as revenue rose 5% to 12.6 billion.
Analysts were on average expecting underlying quarterly operating income to fall 13.1% to 644 million euros on broadly flat revenue of 12.4 billion, according to a poll carried out for Reuters.
Confirming recent comments by Europe's aviation regulator, Airbus Group said its latest jetliner, the A350, was "progressing towards certification" in the third quarter in time for first delivery by the end of the year, as planned.
Analysts say completing Europe's answer to the lightweight carbon-composite Boeing 787 Dreamliner is the biggest issue facing the Franco-German group as it aims to boost margins and avoid technical problems and delays experienced by its rival.
The head of the European Aviation Safety Agency told Reuters last week the A350's safety certification, the key milestone before any new aircraft's delivery, appeared to be on track for the end of the summer barring any new hiccups.
Industry sources say it could come as soon as end-August.
Airbus struck a more cautious note on its flagship jetliner, the double-decker A380 superjumbo, however, saying it was "acting on the lessons" learned from tests and experience as it comes up for six-year maintenance checks. It did not elaborate.
Airbus is "making progress" towards achieving a previously stated target of breaking even in 2015 on the world's largest passenger jet, which also had a troubled development and experienced delays before entering into service in late 2007.
Airbus Group meanwhile reported another hefty outflow of cash in the first quarter as it earmarks liquidity for major projects. Free cashflow before acquisitions came in at a negative figure of 2 billion euros, though this was less than the unusually weak level of 3.2 billion seen a year earlier.
Airbus is aiming for stable free cashflow for the year.
Revenue at Airbus Helicopters rose 14%, and operating profit at the former Eurocopter unit almost trebled compared with the same quarter a year ago when flight restrictions in the wake of a series of incidents hit Super Puma deliveries and services.
Defence and Space operating profit rose marginally as the company announced an end to a stand-off with Turkey over delivery of the first A400M, Europe's military transporter developed by Airbus. ($1 = 0.7270 Euros)