Airbus parent EADS net profit up 45% in Q3
November 14, 2013 By The Associated Press
Nov. 14, 2013, Paris, France - Airbus parent company EADS said strong demand for its commercial aircraft helped its third-quarter profits increase by a hefty 45 per cent.
But the European jet maker warned Thursday that its free cash flow, a
measure of cash generated by a business, would be negative 1.5 billion
euros ($2 billion) this year because of its investment program into
lifting production and development of programs such as the A350
long-range wide body, which is supposed to enter service in the second
half of next year.
Previously, the company had said its free cash flow would
break even this year, compared with positive 1.5 billion euros last
The company said in a statement that net profit
for the July-September quarter rose to 436 million euros, up from 301
million euros a year earlier.
EADS, which next year is adopting
the "Airbus" name for its overall corporate identity, said its free
cash flow is being squeezed as some of its government military customers
cut spending amid tightened budgets, as well as unexpected additional
costs tied to the A350 and other programs.
Speaking to reporters, Chief Financial Officer
Harold Wilhelm said "there's still a long way to go" on the A350 with
some higher costs, but that the program remains on track for entry into
service late next year.
Wilhelm also said the free cash flow situation will improve before the end of this year.
EADS still expects its operating profit before
one-offs, its preferred earnings gauge, to reach 3.5 billion euros this
year, up from 3 billion euros in 2012.
U.S. rival Boeing reclaimed the
title of world's largest airplane maker from Airbus last year,
delivering 601 planes in 2012 to Airbus' 588 deliveries. But last month
Airbus secured its first-ever order from Japan Airlines, a deal that
undermines Boeing's long-held dominance of the Japanese aviation market.
As of the end of October, Boeing had delivered 530 aircraft to Airbus' 504.
Airbus has the upper hand on aircraft sales,
though, booking 1,265 orders through the end of October to Boeing's
1,102. It expects to deliver 620 aircraft this year, including 25 of its
In a recent interview with the Associated Press,
Airbus Chief Executive Fabrice Bregier said Airbus will regain the lead
on deliveries around 2017 or 2018, when the company ramps up production
of the A350.
The contest between the two
aircraft makers is about more than bragging rights. Boeing forecasts
that over the next 20 years the global demand for new airplanes will
exceed 35,000 aircraft valued at $4.8 trillion.
The A380, which seats well over 500 people in a
typical cabin configuration, has seen little demand this year, with
Airbus booking no new orders so far. The company says the aircraft
remains a priority, and is still promising to sell 25 of the jets by the
end of this year.