Airbus parent EADS returns to profit in Q4
Wednesday, March 9, 2011; 7:58 AM
MUNICH -- European aerospace giant EADS NV revealed Wednesday that lower charges for delayed programs such as its A400M military transport plane helped it return to profit in the fourth quarter.
However, the parent company of Boeing rival Airbus forecast flat earnings in 2011.
EADS reported it made euro355 million ($493 million) in the last three months of 2010, compared with a loss of euro1.1 billion in the same period a year earlier when spiraling costs on its new military transport, the A400M, and its A380 superjumbo jet took a heavy toll on earnings.
Chief Financial Officer Hans Peter Ring said EADS also benefited from "an impressive rebound in the commercial market, especially in growth-hungry developing markets."
Investors cheered the results despite EADS' forecasting flat operating earnings of euro1.3 billion this year before any one-off charges. The company's stock in Paris rallied 3 percent in early trading to euro20.43.
A more detailed look at the results statement shows that Airbus took in orders for 574 new aircraft last year worth $74 billion at list prices, besting its U.S. rival for the third year running. A strong upturn in the aviation market, especially in fast growing Asian countries, has spurred a raft of new jet orders from airlines scrambling to meet demand.
On Wednesday, Hong Kong's largest airline Cathay Pacific Airways announced an order for 27 new jets including 17 from Airbus and 10 from Boeing.
And Tuesday ILFC, the world's largest aircraft leasing firm, announced plans to buy 100 of Airbus' new A320neo jets, in an attention-grabbing deal potentially worth over $9 billion at list prices.
Airbus says the A320neo has aerodynamically improved wingtip extensions and fuel-efficient engines which will deliver up to 15 percent in fuel savings. It foresees a potential market for about 4,000 A320neo aircraft.
EADS Chief Executive Louis Gallois predicted that U.S. airlines would also begin ordering planes, after the steep two-year drop caused by the recession sapped their profitability.
"I'm confident that thanks to their improving profitability, U.S. airlines will start a new ordering wave," Gallois said.
EADS is a European holding company that also encompasses Eurocopter helicopters, Astrium satellites and Cassidian defense electronics businesses.