As a strong performance from Finmeccanica's defence activities offset civil losses
EADS says it is on course to meet its 2002 targets of €30 billion ($30.3 billion) in revenues and earnings before interest and taxes (EBIT) of €1.4 billion after achieving a nine-month EBIT of €1.013 billion. The group is more cautious about the longer term, however, and warns that a double-digit EBIT margin is unlikely in 2004 due to an expected "double-dip" crisis in commercial aerospace.
Meanwhile, a strong performance by Finmeccanica's defence and helicopter activities helped offset weaknesses in civil aeronautics and space to push the European manufacturer's net profits for the nine months to €107 million from €93 million a year ago.
Despite EADS' optimism for the full year, results for the nine months to September are down on the same period last year. Revenues were slightly down from a year ago at €20 billion, compared with €20.7 billion, mainly due to lower Airbus deliveries and the lower dollar-euro exchange rate. Orders during the period of €22.3 billion pushed the total order book to €177 billion (€183 billion at the end of December 2001).
Airbus performed strongly, with a €1.07 billion EBIT, down from €1.13 billion, despite increased research and development costs of €1.07 billion and reduced deliveries of 219 aircraft. Revenues were down slightly to €13.75 billion.
EBIT for the military transport aircraft division slipped further at a €79 million loss, from a €12 million loss a year ago. EADS says the A400M programme, once it is confirmed, will "contribute substantially" to the division's profitability.
The aeronautics division saw EBIT drop from €144 million to €132 million due to lower activity in the civil aviation aerostructures business and development costs for the A380. The space division continued to perform poorly, with a €101 million loss, and EADS says restructuring and reducing operating costs "remain a top priority". Restructuring of the defence and civil business have reduced its loss from €163 million to €91 million. EBIT breakeven is predicted for the division for the full year.
Finmeccanica saw revenues for the nine months rise to €5.28 billion, from €4.73 billion, while total orders of €5.13 billion, up from €3.92 billion, pushed the order backlog to €19.4 billion. Defence revenues climbed 8% to €176 million, while operating profit rose to €14 million (from €4 million) thanks largely to Galileo Avionica.
Source: Flight International
