European Aeronautic, Defence & Space Co. (EAD) returned to profit in the first quarter and raised its guidance for some earnings this year, while cautioning that its latest aircraft program remains “very challenging.”
First-quarter net income reached 133 million euros ($169 million), compared with a year-earlier loss of 12 million euros, EADS said today in a statement. Profit fell short of an estimate for 239 million euros in a survey of analysts. EADS said its Airbus SAS subsidiary booked a charge of 158 million euros to fix wing cracks on the A380 double-decker aircraft.
The company raised its guidance for earnings per share to “above 1.85 euros” for this year from more than 1.65 euros, and maintained a goal to lift jet deliveries in 2012 to a record 570. EADS, based in Paris and Munich, also reiterated its guidance for operating profit before special items to rise above 2.5 billion euros this year.
Profit by that measure reached 480 million euros in the first quarter, while revenue climbed 16 percent to 11.4 billion euros, EADS said. Airbus contributes two thirds of sales.
“Demand for commercial aircraft and civil helicopters remains healthy and our institutional business fared reasonably well despite European budget pressures and an uncertain economic environment,” EADS Chief Executive Louis Gallois said in a statement.
The 68-year-old Frenchman will retire from the top post after the shareholder meeting in Amsterdam, and be succeeded by 53-year-old German Tom Enders. Enders has run Toulouse-based Airbus since 2007, and before that held posts including co-chief executive of EADS as well as head of EADS’s defense unit, now called Cassidian.
EADS booked the charge of 158 million euros in the quarter to fix cracks in the wings of the A380 flagship double-decker aircraft, a permanent repair that it said was “more complex” than initially assumed.
Airbus is still aiming to deliver 30 A380s this year, though the target has become more challenging, and the company is in discussions with customers amid a “more back-loaded delivery pattern,” EADS said. The plan to break even on the A380 program in early 2015 remains, EADS said.
The A350 program for a new wide-body aircraft to challenge Boeing Co. (BA:US)’s 787 and 777 jets also remains “very challenging,” EADS said today.
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