Robert Wall
French aerospace supplier Safran SA said Thursday its
third-quarter revenue rose 6.8% amid sustained demand for engines
powering Boeing Co. and Airbus Group NV jetliners and a surge in
deals for turbine spare parts.
Safran said sales in the July through September period reached
3.6 billion euros ($4.6 billion). Sales rose across its units,
except for the defense division, where revenue dipped 0.8%.
Sales in the first nine months of the year rose 5.2% on a
reported basis, reaching about 10.8 billion euros ($13.8
billion).
The company also confirmed its earnings guidance for the full
year. Adjusted recurring operating income is set to increase by a
percentage approaching the "mid teens" in 2014, compared with "low
double digit" growth previously. The company lifted its guidance in
announcing half-year results.
"Our nine-month performance provides comfort to achieve our
outlook for 2014 and strong confidence for success in the longer
term," Chairman and Chief Executive Jean-Paul Herteman said in a
statement.
Safran has benefited from surging demand for Airbus and Boeing
jetliners that is causing both plane makers to boost output. Boeing
said recently it would lift output of the 737 single-aisle jet to
52 aircraft per month in 2018. The aircraft is exclusively powered
by engines built by Safran in a joint venture with General Electric
Co.
Mr. Herteman said the company and GE had collectively booked
orders for 7,700 so-called Leap engines. The product is the sole
engine offered on the Boeing 737 Max, an upgraded model of the U.S.
plane maker's most popular jet, and it competes for orders on the
Airbus A320neo.
Despite the strong results, Safran signaled continued
uncertainty about some payments from government customers. Cash
flow for the year will be dependent on payments from those
customers, where it said "significant uncertainty remains."
Safran said it enjoyed a EUR7 million currency tailwind in the
third quarter. The company also said it had locked in a lower
currency hedge rate for the euro against the dollar for next year,
with an exchange rate of $1.25, or one cent better than in
2014.
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