Airbus performance lead EADS to raises its profit growth target

Strong performance of Airbus, one of the main subsidiaries of EADS, Europe’s biggest aerospace and defence group, has encouraged its full-year profit growth target to 18 per cent.

EADS interim earnings before interest and tax jumped 57 percent of EURO 1.54 billion. In addition, the company’s margin increased from 6.7 per cent last year to 9.6 per cent in the six months to June 30.

Net profit more than doubled to EURO 816 million. Airbus’s ebit contribution was 47 per cent higher at EURO 1.4 billion. Airbus delivered 189 aircraft to customers in the half, 28 more than during the same period last year. It expects to deliver 360 aircraft this year.

Airbus had orders for 1,579 aircraft by June 30, although the figure has increased because the first firm commitments for the A350, the latest prototype, have since been received. Airbus will start incurring costs for the mid-sized A350 this year, with an end-of-year launch target.

EADS’s performance was also aided by a favourable currency hedging programme and the company mostly avoided the weakness of the US dollar, its sales currency.

The chief executives were confident that EADS would meet its previous revenue target of EURO 33 billion for the year, with ebit of at least EURO 2.6 billion.

EADS owns 80 per cent of Airbus and BAE Systems, the UK group, holds the other 20 per cent.

Analysts had reasoned impressive Airbus performance and forecast a 50 per cent improvement in EADS’s half-yearly ebit. Surprised by the better-than-expected figures, investors helped to lift EADS’s shares in Paris by 3 per cent to EURO 27.58.