Selloffs Blamed for Flat Thales Revenue

Defense electronic systems company Thales said Wednesday its revenue was almost unchanged at 10.264 billion euros ($13.37 billion) last year from 10.263 billion euros in 2005, blaming a poor performance of its naval division, currency effects and divestments.

The figure came in below the 10.34 billion euros ($13.46 billion) forecast by analysts in a Dow Jones Newswires poll.

Thales said its full-year revenue grew 4.3% on a like-for-like basis -- stripping out the effects of acquisitions, selloffs and exchange-rate fluctuations -- compared with 3.8% in 2005.

Currency effects reduced revenues by 73 million euros ($95 million), Thales said, and the sale of its Broadcast & Multimedia, High Tech Optics and satellite navigation operations trimmed a further 345 million euros ($449 million) from sales.

Thales said revenue at its Naval division dropped 10% to 1.33 billion euros ($1.73 billion) from 1.48 billion euros.

Revenue at the Aerospace division rose 6% to 2.47 billion euros ($3.22 billion), while sales at the Air Systems division were almost unchanged at 1.58 billion euros ($2.06 billion).

Land and Joint Systems' sales increased 10% to 2.4 billion euros ($3.13 billion), while sales at its Security division rose 2% to 1.2 billion euros ($1.56 billion) and sales at the Services division rose 3% to 1.21 billion euros ($1.58 billion).

Thales said order intake was strong at 10.8 billion euros ($14.1 billion), expanding the order book to 20.7 billion euros ($27 billion) at the end of 2006.

However, total order intake in 2006 was 15% lower than the exceptionally high 12.78 billion euros ($16.64 billion) recorded in 2005. Eight of the new orders were worth more than 100 million euros ($130 million), Thales said, while none was worth more than 200 million euros ($260 million).

Thales shares rose 0.8% to 40.30 euros ($52.48) in Paris. Thales is due to report its full-year earnings Mar. 8.