Airbus Maker EADS Will Top Full-Year Profit Expectations

European aerospace group EADS took a new 341 million euro charge for its delayed A400M military project on Friday but said it would exceed its full-year profit target as it posted third-quarter results above expectations.

The Airbus parent said it had swung to a quarterly operating profit, or earnings before interest and tax, of 860 million euros compared to a 711 million euro loss a year earlier.

EADS sales rose 6 percent to 9.701 billion euros. 

The world's second-largest aerospace group behind Boeing also reported a third-quarter net profit of 679 million euros compared with a year-earlier loss of 776 million euros.

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Planemaker subsidiary Airbus posted a 789 million euro operating profit on revenues of 5.859 billion euros.

Analysts had on average forecast third-quarter group-wide EBIT of 679 million euros on revenues of 9.234 billion euros, including Airbus EBIT of 179 million euros on revenues of 5.944 billion, according to a Reuters poll.

Analysts had also forecast net profit of 377 million euros.

EADS said it was well-placed to weather the financial crisis with a record 9 billion euros in net cash, but again blamed the propulsion system that includes the engine for delays to the A400M, a 20 billion euro European NATO troop and cargo lifter.

EADS, which last year took 1.4 billion euros in provisions as it pushed Europe's biggest military project back by 6-12 months, announced a new third-quarter charge of 341 million euros for the A400M and said on Friday it would face new delays.

It also announced an accounting change pending clarification of the A400M schedule, which boosted revenues by temporarily altering the rate at which milestone payments are recognized.

EADS said it would likely exceed its full-year EBIT forecast of 1.8 billion euros after making 2 billion euros in the first nine months. "This excludes any additional impact for the A400M, due to the uncertainties of the programme," it said.

EADS continued to forecast full-year revenues of over 40 billion euros based on 470 Airbus aircraft deliveries.

It doubled its forecast for 2008 free cash flow excluding customer financing to more than 2 billion euros ($2.50 billion). 

EADS forecasts continue to be based on a euro at $1.45. The European currency currently fetches around $1.27.

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