PARIS, July 28 (Reuters) - Aero engine maker Safran reported a 0.9 percent dip in core first-half profit on Friday as it carries out a product switch between its best-selling CFM56 engine and the new LEAP.
The French company, which recently sold its security business and won backing from its shareholders to go ahead with a reduced offer for Zodiac Aerospace, said ongoing operations were clouded by weaker propulsion earnings.
Recurring operating income fell to 1.218 billion euros ($1.42 billion) from 1.230 billion, dragging the operating margin 0.2 percentage points lower to 15.2 percent.
Revenues grew 0.6 percent or 2.4 percent on an underlying basis to 8.038 billion euros. The company reaffirmed targets.
Analysts were on average expecting an operating profit of 1.201 billion euros on revenues of 8.086 billion, according to Thomson Reuters I/B/E/S consensus data.
Margins fell by more than a percentage point at the propulsion division as lower deliveries of the profitable CFM56 made way for loss-making early deliveries of the LEAP and as the helicopter market remained depressed.
Aircraft equipment and defence margins rose, while civil aftermarket revenue grew 8.4 percent in dollar terms in the first half but failed to make up for other shortfalls.
Safran aims to break even on LEAP by the end of the decade.
Chief Executive Philippe Petitcolin said in a statement that the overall ramp-up of LEAP engines was going according to plan.
The engines, co-produced through Safran's CFM joint venture with General Electric, have nonetheless suffered some manufacturing glitches affecting Boeing and Airbus.
Although CFM has avoided the number of teething problems felt by rival Pratt & Whitney, India said on Thursday that its state carrier had experienced some delays in getting Airbus jets fitted with engines from the joint-venture.
($1 = 0.8554 euros) (Reporting by Tim Hepher, Cyril Altmeyer; Editing by Sudip Kar-Gupta)