EADS profit higher than expected

 
City A.M. Reporter
Airbus parent EADS unveiled stronger-than-expected third-quarter profits and boosted its outlook and production targets on the back of a recovery in aircraft demand.

Chief executive Louis Gallois said a rise in passenger jet orders was starting to feed through to results but that the aerospace group was wary of budget pressures in European countries which could weigh on its business with governments.

The news came weeks after Boeing also beat expectations with quarterly profits and raised forecasts as the two aircraft giants rake in new orders from the Middle East and Asia and Western aircraft finance firms.

EADS said it would make an operating profit of at least 1.1bn euros (£934.4m) in 2010 after posting an 88 per cent increase to 378m in the third quarter on revenue up 18 per cent at 11.246bn. The group swung to a quarterly net profit of 13m from a loss of 87m.

Analysts had on average forecast a 312m euro quarterly operating profit and revenue of 10.819bn, according to a Reuters poll.

Lifted by a brisk recovery in demand from leasing companies and airlines this year, Airbus boosted its forecasts for orders and deliveries and announced plans for an increase in wide-body production to nine planes per month from the first quarter of 2012.

The world's largest civil planemaker expects 2010 orders of up to 500 planes, compared with a previous target of more than 400 and actual orders which stood at 421 at the end of October.

It also became more explicit about striving to break the 500-plane barrier for aircraft deliveries in 2010 by targeting "slightly more" than this number of handovers. It had previously aimed for around 500 deliveries, a civil industry record.

Airbus lags rival Boeing on new plane orders but remains ahead on deliveries so far this year.

EADS reaffirmed a target of 44bn euros in 2010 revenues and raised its free cashflow forecast to 1bn euros before customer financing instead of breakeven.