Results from Boeing and EADS back upbeat civil aerospace predictions, but space continues to cause concern
Boeing and EADS have underpinned their bullish predictions of a civil aerospace recovery with strong financial performances in the first half of 2004, but neither can foresee any recovery in the depressed commercial space sector.
EADS warns that surging first- half profits at its Airbus division will be tempered by fewer deliveries of more lucrative widebodied airliners in the second half. A 58% increase in earnings before interest and taxes (EBIT) at Airbus during the first six months of 2004, to €982 million ($1.2 billion), helped EADS lift overall EBIT by 66% to €985 million. Airbus revealed at last month's Farnborough air show plans for a production ramp-up to meet rapidly rising demand (Flight International, 27 July-2 August).
A €56 million profit at the Aeronautics division was cancelled out by red ink at Space and Defence and Security Systems.
EADS chief financial officer Hans Peter Ring is sticking by his forecast that all divisions except Space will achieve their targeted 10% EBIT margins by 2006. Ring says the defence businesses traditionally post stronger performances in the second half as governments tend to close contracts before the turn of the year.
UKfoot-dragging over the second tranche of Eurofighter Typhoon procurement continues to give cause for concern, but Ring is confident a deal will be struck in time to prevent a production hiatus (Flight International, 27 July-2 August). "We honestly do not expect that we would run into that situation," he says, "but it would really become very serious if we further delay the whole process."
The heavily restructured Space division finally broke even in the second quarter but "will remain under pressure in terms of margin", says Ring.
Based on its first-half performance, EADS is raising its full-year EBIT forecast from €1.93 billion to €2.1 billion.
Boeing meanwhile managed to turn in a $1.47 billion first-half operating profit, compared with a $695 million deficit for the same period last year. Integrated Defence Systems (IDS) posted strong growth in revenues and operating margin and saw its backlog boosted after winning the US Navy's $3.9 billion Multi-mission Maritime Aircraft programme.
Loss-making Launch and Orbital Systems, part of IDS, saw second quarter revenue decline 13% due to "continued weakness in commercial space markets".
Boeing Commercial Airplanes handed over 151 aircraft in the first half, six more than the same period last year, but revenues dropped 4% because of a higher proportion of narrowbody deliveries.
ANDREW DOYLE / LONDON
Source: Flight International
