EADS lifts forecasts, Airbus to hike output


Airbus parent EADS boosted its revenue and commercial airplane forecasts and set out plans to increase jetliner production after a spate of new orders raised hopes of an end to a steep industry recession.

Europe’s largest aerospace company said Airbus would increase production of its most-sold family of single-aisle planes to 40 a month by the first quarter of 2012, from 34 now.

It forecast 500 Airbus plane deliveries this year, edging past last year’s record of 498 aircraft, and upped its forecast for new jetliner orders by a third to more than 400 this year after a buying spree by lessors at the Farnborough Airshow, Reuters reports.

The goal means Airbus intends to catch up after a dip in deliveries to 250 in the first half from 254 a year earlier.

However, deliveries at sister unit Eurocopter are likely to fall slightly this year and helicopter orders remain slack.

Despite the surge in optimism, EADS profits fell in the first half due to poorer currency hedge rates and higher R&D spending on new projects. Revenue rose one percent.

EADS said its operating income before one-off items halved to 0.6 billion euros from 1.3 billion euros in the first half and predicted an annual total of 1.2 billion. It maintained its forecast for ordinary operating profit at 1 billion euros.

EADS said it had taken a 550 million euro hit from currency effects in the first half. Its business outlook benefits from a weaker euro but the company is tied for around two years into hedging contracts taken out when the currency was stronger.

The firm raised its annual revenue forecast to 44 billion euros after previously aiming to match last year’s 42.8 billion.

Rival Boeing this week left its forecast for 2011 revenue improvements unchanged.

EADS boosted its cash forecast, predicting negative free cashflow of 600 million euros after customer financing, compared with a gap of 1 billion euros which it had forecast previously.

The figures included a 51 percent drop in second-quarter operating profit to 323 million euros. Analysts had on average forecast 285 million euros, down 57 percent, according to the average of a Reuters poll of 14 firms.

EADS shares closed at 17.59 euros on Thursday.