EADS returns to profit with improved Airbus A380, A400M

European aerospace and defence giant European Aeronautic, Defence & Space Co. (EADS) returned to a profit in the third quarter on lower charges from its A400M military transport programme and increased deliveries of its A380 `Superjumbo', and also raised its 2008 profit forecast.

Shares rallied as much as 8 per cent today after the announcement of the results.

The group earned  €679 million ($867 million) in the three months ended 30 September, despite a  €341 million charge due to delays on the A400M. In the year earlier quarter, it lost  €776 million on €1.4 billion charges related to the A400M. Revenue rose 6 per cent at €9.7 billion, on a 49 per cent pickup in military transport aircraft revenue and a 36 per cent rise in revenue from at EADS' Astrium space programme.

"The pressure on the A400M programme remains and we are conducting ambitious efforts to tackle both the industrial and commercial challenges in discussion with our customers and suppliers," EADS said.

On the outlook, EADS said it should exceed its forecast for earnings before interest and taxes, or EBIT, of €1.8 billion this year, as it's already earned €2 billion on that measure in the first nine months of the year. This forecast, however, excludes any additional impact from the 400M. The group still expects to capture 850 new orders and sales to exceed €40 billion.

The recent appreciation of the US dollar against the euro has helped boost third-quarter results, as most of the company's costs are in euros but its revenue is in dollars.