Business

<< Previous   of   Next >>   ADVERTISEMENT   CONTACT THE HERALD Mike Benbow, Business Editor benbow@heraldnet.com   Published: Thursday, May 15, 2008 Airbus' parent firm EADS back in the black Associated Press PARIS -- Airbus parent EADS said Wednesday it returned to profitability in the first quarter as the planemaker increased deliveries and the company cut costs, helping offset the weaker dollar. European Aeronautic Defence & Space Co. NV reported a net profit in the January to March quarter of 285 million euros ($440 million), compared with a loss of 10 million euros a year earlier. EADS has reported losses in four of the last six quarters. Shares in the company were up 5.2 percent to 16.6 euros ($25.69). "There is a lot to be encouraged by here," said ABN Amro analyst Sandy Morris. "The credibility of the management team is building steadily." CEO Louis Gallois said in a statement the results are "encouraging." "Though many serious challenges have been overcome, there remains much to do," he added. EADS didn't change its expectations for earnings this year but warned of a possible "negative impact" from the weakening dollar later in the year. The dollar's slide against the euro makes it harder for Airbus to compete against the Boeing Co. Unlike its U.S. rival, many of Airbus' costs are in euros, though it sells its planes in dollars. A sizeable restructuring is under way at EADS in which 10,000 job cuts are planned by 2010. Gallois, speaking on RTL radio, said additional measures to compensate for the weak dollar are needed. He mentioned cuts to research budgets and shifting acquisitions to the dollar. The 15-nation currency has hit record highs in recent weeks against the dollar and purchased $1.5422 in morning European trading Wednesday. "The supply chain really has to move" into the dollar-zone, said Morris. "It will be expensive and painful to do this but its arguably the only way you can secure the company's long-term future." The company is already planning to build a new refueling tanker for the U.S. Air Force in Mobile, Ala. Boeing has contested the award of the contract to a Northrop Grumman-EADS partnership. Morris said the improvement of EADS' net cash position to 8.3 billion euros ($12.84 billion) in the quarter, from 7 billion euros a year earlier, means the company can afford further restructuring.

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