(Updates with breakdown of divisional performance from sixth paragraph)
July 29 (Bloomberg) -- European Aeronautic, Defence & Space Co., the parent of Airbus SAS, said profit in the first half rose 39 percent after higher plane deliveries outweighed lower revenue at the defense subsidiary.
Earnings before interest and tax advanced to 563 million euros ($806 million) from 406 million euros a year earlier. Ten analysts surveyed by Bloomberg had estimated 511 million euros. Sales rose 8 percent to 21.9 billion euros, the Paris- and Munich-based company said.
EADS relies on commercial jets for two thirds of sales, and business has boomed as air traffic rebounds and Airbus markets an upgraded variant of its bestselling A320 single-aisle jet. Airbus now expects to capture 1,000 jet orders before yearend, compared with 644 last year, EADS said, while cautioning that large aircraft programs will require its ‘utmost’ attention.
“Our results for the first half of 2011 mirror the strong demand in the commercial aviation sector,” Chief Executive Officer Louis Gallois said in the statement.
Cash Flow Guidance
EADS reiterated its outlook of earnings before interest, tax, and exceptional items of 1.3 billion euros this year. It lifted its forecast for free cash flow, saying the figure would be around 1 billion euros in 2011, compared with an earlier target of ’’positive.’’ Currency volatility remains a concern, the company said.
Airbus sales rose 11 percent to 15.3 billion euros, with the planemaker accounting for 70 percent of EADS’s overall revenue. Operating profit almost doubled to 202 million euros after commercial plane deliveries rose to 258 planes, including 10 double-decker A380s. Airbus is targeting 25 A380 deliveries for the full year.
Operating profit excluding one-time items at Airbus rose to about 330 million euros from 270 million euros. The gain was trimmed by hedge-rate deterioration of about 160 million euros and higher research and development expenses, particularly on the A350. Airbus is still targeting first deliveries of the aircraft in late 2013, calling the target “challenging.”
Sales at the Cassidian defense fell to 2.13 billion euros from 2.18 billion euros, while operating profit fell 20 percent to 89 million euros. EADS said the unit will take one-time charges in the second half linked to an overhaul intended to help the group compete in an era of shrinking defense budgets.
“Preparations of the transformation program are well underway,” EADS said. “A new organization should be announced shortly.”
The reported Ebit figure, which EADS refers to as Ebit*, excludes goodwill impairment and exceptional relating to the depreciation of fair value adjustments made from when the company formed EADS in 2000.
The order book improved, with a backlog of orders worth 453.8 billion euros at June 30 compared with 448.5 billion euros at the end of 2010, EADS said. EADS said it had cash of 11 billion euros at the end of the second quarter.
--Editor: Benedikt Kammel
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