Airbus Group SE on Friday reported a 5% rise in second-quarter
profit even as the A400M military transport plane program, which
has repeatedly been a drag on earnings, once again impaired the
European plane maker's financial results.
The maker of A380 superjumbos and Ariane 5 rockets said net
income for the three months ended June 30 was €732 million ($801
million), compared with €696 million in the same period last
year.
The plane maker booked a €290 million charge against earnings on
the A400M program two months after the first crash of one of the
planes in Spain killed four of six company employees onboard. The
fleet was briefly grounded and deliveries halted, though those
restrictions have since been lifted.
Airbus sales in the April through June period rose 16% to €16.8
billion as the company delivered several more jetliners that in
last year's second quarter. Airbus and rival Boeing Co. are
delivering ever more planes backed by record backlog of orders as
airlines seek to replace older, less fuel efficient planes with
newer ones.
"We continue to see healthy commercial momentum across the
portfolio as shown by the major contracts announced at June's Paris
Air Show," Chief Executive Tom Enders said, adding "we are focused
on operational priorities, including A350 and A400M ramp-up, cost
control and deliveries plus the A320neo transition, as we strive to
further enhance profits and cash."
Airbus has struggled with development and production of the
A400M program, which has caused the project to be years late and
cost billions of dollars more than expected. Problems have ranged
from the aircraft's large turbo-propeller engine to some of its
complex systems, causing the program to fall about four years
behind plan.
The European plane maker has secured 174 orders for the A400M,
with Malaysia the only customer beyond a group of six European
countries and Turkey backing its development. Without additional
deals Airbus will lose money on the project, the company has
said.
Airbus's earnings before interest and taxes excluding some
one-time items, a closely watched benchmark, advanced 15% to €1.2
billion in the second quarter.
The company confirmed its full-year earnings guidance for an
increase in sales and higher operating income excluding mergers and
acquisitions. It also said it would still this year deliver the
first A320neo, an upgrade of its popular single-aisle plane,
despite a disruption in flight trials that temporarily idled two
test planes with component problems on the engine made by United
Technologies Corp.'s Pratt & Whitney engine unit.
Write to Robert Wall at robert.wall@wsj.com
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