Business

<< Previous   of   Next >>   ADVERTISEMENT   Related Stories • Boeing pleased with 2007, primed for 2008 1/5/08 • Boeing tops its 2007 delivery goal 1/4/08 • Boeing's '07 order tally near 1,400 1/3/08 • The year ahead: Boeing, biotechs and banking 12/30/07   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Monday, January 7, 2008 Analyst predicts weak year for jet orders By Emma Vandore AP Business Writer PARIS -- Shares in European Aeronautic Defence & Space Co. NV dropped more than 7 percent Monday after Deutsche Bank predicted weaker commercial jet orders in 2008. "We have growing concerns over weaker commercial aerospace cycle fundamentals for 2008," said analysts Benjamin Fidler and Sebastien Gruter in a research note. "This will likely result in weaker order momentum for Airbus," Deutsche Bank said in downgrading its rating for Airbus' parent company to "sell" from "hold." The warning about comes after a bumper year in which Airbus and rival Boeing Co. set an industry record for orders. Boeing Co. sold 1,413 commercial jets in 2007 while delivering 441 planes, its best showing in six years, the U.S. company said last week. Its European rival is expected to come out ahead on both orders and deliveries when it reports results Jan. 16. Sales may slow this year should waning consumer confidence and other U.S. economic woes decrease air travel. Airlines are expected to delay new orders until their finances and the economy at large show stronger signs of recovery. Peter Arment, an analyst with American Technology Research Inc., said in a research note that he expects orders to halve this year, echoing recent predictions by other analysts. Another worry for EADS, the Deutsche Bank report notes, is the falling dollar, which reduces the value of the planes sold by Airbus. "It's an explosive cocktail" of risks confronting traders as they return from year-end vacations, said Pierre Boucheny, an analyst with Kepler Securities in Paris who has a "reduce" rating on the stock. "2007 was a very, very good year" for orders, he said. "2008 will be more difficult." The dollar fell 11 percent against the euro in 2007 and analysts say a raft of disappointing U.S. economic data and oil prices, which struck $100 for the first time ever last week, could push it still lower. EADS Chief Executive Louis Gallois said in November that the weaker dollar means Airbus needs to find an extra 1 billion euros ($1.47 billion) in cost savings, equivalent to the cost he has cited in the past of a 10-cent rise in the euro against the dollar. That is in addition to a restructuring program, dubbed "Power8," which aims to recoup 2 billion euros ($2.95 billion) in savings by 2010 and cut 10,000 jobs. A key issue for the Deutsche Bank analysts is "the need for EADS to deliver further material savings beyond Power8." They also mentioned fears over the ramping up of production on the much-delayed A380 superjumbo, uncertainty over the development of the mid-size A350 and delays to the A400M military transport jet. Altogether it makes the shares "unappealing," the Deutsche Bank research note said. A report in Germany weekly Wirtschaftswoche pointed to new problems with the A400M, saying the planned July date for its first flight is questionable. In November, EADS announced a delay to the A400M program which it said could cost as much as 1.4 billion euros ($2.06 billion) in penalties and other charges. Airbus' parent company fell 7.5 percent to 19.20 euros ($28.31) in Paris. EADS did not return several calls Monday.

1. Fire destroys Silver Lake landmark 2. Tree clearing, mud slide angers Everett neighbor 3. County tackles bikini barista rules 4. Six people injured in Machias car crash 5. Edmonds councilwoman dies at 59 6. Search for missing hiker called off 7. Later start for school day unlikely in Marysville 8. Extended tax credit should spur home sales 9. Hopes for Snohomish excursion train may hinge on railway purchase 10. Designing a new business 2 - Top 10 Stories Most Talked about 3 - Top 10 Stories Most Emailed

• Gough on track to keep job • Jazz vocalist headlines NPAC • Mountlake Terrace makes football history • Tax revenue sagging, city budgets lagging • ‘Touch of Magic' show opens at Gallery North • Jackson repeats as South champs • Holiday Bazaars Calendar • Meadowdale storms back to grab title • Edmonds moves to Fire District 1 • Boeing will build, flight test and deliver 787s in South Carolina to spe ... • Snohomish County EDC promoting job growth in key industry clusters • $4 million grant to advance brain tumor research has Everett links • Providence medical center construction tops off its 12-story steel frame ... • Tulalip affordable housing project to be financed by KeyBank, Raymond Ja ... • Arlington's Lak of Ink has a growing following for Luke Kooyman's creati ... • Bank of the Northwest formed • Cascade Bank earns $1.6 million