Core profit at Airbus parent EADS rose sharply in the first quarter after the passenger jet maker raised output of its most profitable planes, eclipsing weakness at EADS's helicopter division.
Revenue at Europe's largest aerospace group rose 9 per cent to €12.4 billion, fuelled by a 16 per cent rise in Airbus commercial revenues as it reclaimed the top spot in deliveries after falling behind Boeing in 2012.
The slightly better than expected performance confirmed an improving outlook for aerospace companies after EADS rival Boeing beat profit forecasts, marking a rare bright spot in the economy as plane makers ramp up output to meet strong demand from Asia and the Middle East.
EADS consumed a significant amount of cash to boost inventories in the first quarter, a move partly seen as a buffer against disruption on its new A350 and other projects, but reaffirmed a goal to break even in free cashflow for the year.
EADS described the first all-new Airbus jet in almost a decade as ‘challenging’ but stuck to a summer target for the maiden flight of Europe’s answer to the Boeing 787 Dreamliner.
The group booked no new financial charges for the A350, which Barclays analysts described as a positive sign taken together with a "great start to the year" for existing models.
EADS painted a weaker picture at Eurocopter where deliveries of the Super Puma have been hit by safety concerns after two emergency North Sea ditchings, reportedly blamed in part on corrosion. Sales and earnings posted double-digit declines.
“A recovery is expected later in 2013 as Eurocopter has now identified the root cause for the technical issues,” EADS said.
EADS operating profit before one-off items - a measure stripping out any major project charges or currency swings to get to the heart of the group’s elaborate results - rose 56 per cent to 741 million euros, the group said in a statement.
’Reported’ operating profit, which still excludes goodwill and some exceptional items, rose almost 79 per cent to €596 million, slightly above market forecasts.
Analysts on average expected reported operating profit to rise 68 per cent to €577 million on sales of €12.06 billion, according to a poll conducted for Reuters. EADS confirmed its forecasts for the year.