PARIS — EADS, the parent company of planemaker Airbus, said Tuesday that first quarter profit fell 40 percent as airlines delayed orders and deliveries. The company also took a charge for its troubled A400M military transport plane.
European Aeronautics Defense and Space Co. said net profit in the January to March quarter fell to $230.76 million — lower than analysts’ expectations. Revenue fell 14 percent in the quarter.
Much of the trouble was at Airbus, which accounts for two-thirds of EADS’ revenue, where the global recession led to a collapse in demand from airlines.
Airbus booked 22 orders in the quarter but also took 14 cancellations, bringing net orders to only eight for the period. That compared to 395 net orders made in the first quarter of 2008.
Analysts say the planemaker may be saving announcements of new orders for the Le Bourget air show in June, but EADS said it “is becoming more challenging” for Airbus to meet even a reduced goal of 300 new aircraft orders this year.
Chief Financial Officer Hans Peter Ring said economic uncertainties make it difficult to gauge future earnings.
“We simply do not have as much forward visibility as we would like,” he said in a conference call.
Shares were down 4.6 percent in Paris midday trading. Credit Suisse analyst Steve East said in a research note that results are “weak” as Airbus cut prices more than anticipated.
“Overall, the company has missed our forecasts and consensus at every level — driven by worse pricing and mix issues at Airbus than we had forecast — and there was a significant free cash outflow — which we were not expecting at this stage of the cycle, i.e. before any production cuts,” East wrote.
Airbus said it cut prices on the 116 aircraft it handed over in the first quarter, compared to 123 delivered in the same period last year.
EADS has indefinitely postponed the first flight of the A400M transport and is now negotiating new technical requirements and commercial terms with the seven European NATO countries that first ordered the plane.
The company could have to repay governments if the project were canceled but it has said that is “very unlikely.”
All told, the A400M has cost EADS euro2.3 billion in penalties and other charges and the company warned there could be more to come.
EADS said its “solid defense and institutional order book provides a certain level of protection and stability” as its cyclical commercial airline business sags.
The company said it expects to have to help customers with financing this year, but did not have to in the first quarter.
Arch-rival Boeing Co., which makes commercial and military jets, reported last month that first quarter profit dropped by half. It earned $610 million in the quarter compared with $1.21 billion during the same period last year.
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