Three fuselage sections of an Airbus A350 XWB are shown in Toulouse, France. (Photo: Airbus/F.Lancelot)
BERLIN Airbus parent company EADS NV posted a 47 per cent dro in fourth-quarter net profit Wednesday after taking costly charges at its helicopter and defence electronics divisions.
The aerospace giant recorded a €325 million net profit in the October-December period, down from the previous years €612 million. But for the full year, its net earnings were up 19 per cent at €1.23 billion from €1.03 billion in 2011.
Theres still some way to go to meet our profitability targets, said chief executive Tom Enders.
Revenues rose 17 per cent during the fourth quarter to €19.22 billion, with the core Airbus division posting a 21 per cent increase to almost €13 billion.
But EADS took a €198 million hit during the quarter at its defence electronics contractor Cassidian, in part reflecting restructuring costs.
Renegotiating contracts with government customers resulted in a €100 million charge at helicopter maker Eurocopter.
The companys core business, aircraft maker Airbus, posted a 36 per cent increase in operating profit during the final three months, rising to €393 million from €289 million in 2011. Of that, orders for civilian aircraft brought in €309 million while military planes garnered €85 million during the quarter.
Spaceflight division Astrium reported operating profits of €121 million, an increase of 19 per cent from €102 million in the same period the previous year.
EADS said it expects to sell more commercial aircraft about 700 in 2013. Revenues will grow modestly, it said, but results will be affected by stuttering sales of the giant A380, which has suffered problems with its wings.
We would love to sell more of the big birds, said Enders. We need to sell more, and we will.
Another headache for Airbus are the production delays for its new A350 Extra Wide Body model intended to challenge Boeings 787 Dreamliner. The 787 program has itself run into difficulties with the entire fleet grounded due to problems with its lithium batteries. Enders was diplomatic about his rivals woes, saying there was definitely no schadenfreude about the 787s grounding.
In its earnings report EADS repeated its warning that the A350 XWB program remains challenging.
Any schedule change could lead to increasingly higher impact on provisions, the company said.
EADS also said it was pushing back delivery of the first A400 M military transport planes from the first to the second quarter of the year.
With defence spending being cut in many industrialized countries, Enders said EADS was satisfied with the current share of defence in its business.
Maybe its not a bad time to have a smaller rather than larger defence business, he told reporters in Berlin, adding that the company planned to look forward after its failed bid to merge with Britains BAE Systems last year.
Investors had also expected to receive an updat Wednesday on the companys internal probe into allegations of bribery in the sale of fighter jets to Austria.
Enders said the results of the investigation which runs parallel to a probe by Austrian authorities would be presented at a later date as its scope had been widened.
Its too early to jump to any conclusions, he said. But the company isnt currently making any provisions for legal repercussions in the case. I have no reason to assume that employees of the company have engaged in misconduct or any criminal behaviour.
The company said it is inviting shareholders to an extraordinary meeting March 27 to approve its new governance structure and a share buyback program for up to 15 per cent of its stock. EADS last year announced sweeping governance changes that will see influence by state shareholders France and Germany shrink.
The company board is proposing a €0.60 increase in dividend at its annual general meeting in June.
