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Airbus parent company EADS NV yesterday reported that first-quarter net
profit fell 39 percent as its plane maker unit struggled with the "challenges"
of producing its A380 superjumbo.
Paris-based European Aeronautic Defence &Space Co said that net profit in
the January-March period fell to 103 million euros (US$129 million) from 170
million euros a year earlier.
Revenue fell 6 percent to 9 billion euros in the period, EADS said in a
statement.
Airbus is struggling to ramp up production of the A380 because the cabins of
the hulking plane require greater customization than other plane models.
The plane "will continue to weigh substantially on" earnings in 2010, EADS
said.
The first A380 was delivered almost two years late to Singapore Airlines in
2007. Chief Financial Officer Hans Peter Ring said on a conference call that
Airbus is still on track to deliver 20 A380s this year, and could even exceed
the target.
EADS also said its hedging position - contracts designed to lock in currency
rates and protect it from negative effects of foreign exchange fluctuations -
deteriorated, weighing on earnings.
The hedging contracts were set before the recent strengthening of the dollar
- linked to fears over sovereign debt in some of Europe's weaker economies.
EADS CEO Louis Gallois said the cheaper euro is good news for the company,
which sells planes in dollars but has most of its costs in euros.
"EADS should benefit in the mid- and long-term if the dollar trend is
confirmed," he said in a statement.
Analysts said EADS results were more or less in line with expectations, and
the company is starting to deliver on its promises. The A380 problems had been
already been flagged to the market. |
