labels: News reports, Aerospace manufacturing
EADS Q2 profits up 46 per cent, at $185.32 million news
30 July 2008

Paris: Airbus parent European Aeronautic Defense & Space Co. NV (EADS) said Wednesday that net Q2 profit went up 46 per cent as a result of cost savings and a "remarkable order intake." Net profits for the three months ending 30 June were up to 118 million euros ($185.32 million), as compared to 81 million euros a year ago.

Revenues increased 5 per cent, to 9.89 billion euros ($15.53 billion).

The European defence and aerospace giant did not change its outlook for revenues and earnings for the year, but expressed its optimism about enhanced aircraft orders. It revised its order expectation for Airbus saying that the aircraft manufacturer would land more than 850 orders in 2008, which was 150 more than it had predicted in May.

"Our order book is at a record level," EADS CEO Louis Gallois said in a statement. At the end of June, its order book was worth a record 354.2 billion euros ($556.27 billion).

The results omitted orders booked at the Farnborough International Air Show earlier this month, where Airbus swamped American rival, Boeing, with massive orders for 247 planes, worth a cumulative $38.7 billion at catalogue prices.

Discounting the deals that were already listed on its books before the start of the air show, Boeing's orders at Farnborough, which is considered to be the the world's biggest air show, drop to just $5.6 billion. Boeing claimed orders of 197 planes worth $23.1 billion at the show.

EADS also said it booked a charge of  715 million euros ($1.1 billion) to cover compensation for late delivery of its A380 super jumbo aircraft.

The Q2 results take EADS' first-half net profit to 403 million euros ($632.91 million), a 332 per cent increase over the year ago period. Revenue in the first six months increased 8 per cent to 19.74 billion euros ($31 billion).

EADS said the depreciating dollar wiped out 700 million euros ($1.09 billion) from profits in the first half. EADS says every 10-cent drop in the dollar cuts euro1 billion ($1.57 billion) from earnings. This particularly affects Airbus as the aircraft manufacturer incurs its costs in euros, though it sells its planes in dollars.

"To maintain competitiveness, EADS has to tackle the ongoing US dollar weakness," Gallois said in the statement. He said that EADS would seek an additional 1 billion euro ($1.57 billion) in savings in 2011 and 2012. This will be over and above its restructuring programme, dubbed Power-8, which aims to shed 10,000 jobs and reduce annual spending by 2.1 billion euros ($3.3 billion) by 2010.

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EADS Q2 profits up 46 per cent, at $185.32 million