EADS First-Quarter Earnings Plunge on Airbus Restructuring
Airbus parent EADS said on Thursday first-quarter operating profit plunged after it took a 688 million-euro ($931.3 million) provision at the planemaker as part of its Power8 restructuring programme.
The group, whose profits slumped last year on the back of a weak dollar and industrial problems at Airbus, said earnings before interest and tax (EBIT) dropped to 89 million euros ($120.4 million) from 791 million in the year-ago quarter.
The Airbus unit posted an operating loss of 69 million euros ($93.32million), down from a profit of 684 million euros in the first quarter last year.
Group net performance swung to a 10 million euro ($13.52 million) loss from a 522 million euro profit in the same quarter last year.
Sales dipped to 9.0 billion euros ($12.17 bilion) from 9.1 billion.
Analysts had on average forecast a group-wide EBIT loss of 284 million euros and a net loss of 237 million euros.
EADS confirmed its 2007 outlook for a single-digit percentage decrease in sales assuming a euro/dollar exchange rate of $1.3 compared with the current $1.35.
EBIT is expected to remain roughly stable but the group is looking for another "substantial" loss at Airbus this year.
Airbus has been hit by delays to its A380 superjumbo and faltering attempts to counter the success of Boeing's mid-sized 787 Dreamliner with its own A350.
EADS said its Power8 restructuring plan, which includes 10,000 job cuts, was "progressing."
"Through the first quarter of 2007, the aerospace and defence market was supportive and fuelled our businesses," EADS said in a statement.
"But against this backdrop, as expected, Airbus had a challenging time, which only highlights the inevitability of the Power8 restructuring, designed to address challenges that will unfold over the coming years."
EADS said a strong commercial performance at its Eurocopter helicopter unit and Defence & Security cushioned the book-to-bill ratio above one, ensuring sales exceeded deliveries for the group as a whole despite lower orders at other units.