Profit At Airbus Exceeds Expectations (EPA: AIR)

Airbus Group, the European aerospace giant, reported a better-than-expected profit for the first quarter. Net profit for the three months to March 31 almost doubled to a reported 439 million euros, or $602 million, from €227 million in the same quarter a year earlier. Profits were helped by lower costs linked to production of the company’s A380 superjumbo jet and favorable exchange rates.

Thomas Enders, chief executive of Airbus, stated that the first-quarter performance was encouraging, but expressed caution that a “strong focus remains on program execution and the implementation of our various improvement and restructuring plans.” Newer, more fuel-efficient aircraft have sparked a wave of growth for Airbus’s passenger-jet business, which represents more than 70 percent of the group’s sales. Before interest, taxes and one-time expenses, earnings declined 4.6 percent, to €700 million, on sales of €12.6 billion.

In the first quarter, the value of new commercial jet orders fell sharply to a little less than €18 billion, down from €46.7 billion in the same period the previous year. Last year, first quarter sales had been bolstered by a $24 billion order from Lion Air of Indonesia. Nonetheless, Airbus maintained earlier forecasts for revenue and orders and said it expected new orders to pick up over the year. Last year, Airbus delivered 626 passenger planes and reported €59 billion in revenue.

The company warned that despite the increase in profit, there were still challenges that remain. This year, the company’s A350-XWB wide-body plane — the group’s first all-new commercial jet in more than six years — is scheduled to go through final development and testing before entering into service. Airbus said the A350 was “progressing toward certification” from European safety regulators, with approval expected in the third quarter. However, any last-minute issues could affect the timetable and result in delays and/or unanticipated charges.