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EADS stands by targets
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September 20, 2001: 4:02 a.m. ET
European aerospace company stands by target despite weakening markets
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LONDON (CNN) - EADS, Europe's biggest aerospace company, said on Thursday it was sticking to its profit targets "despite an highly uncertain" airline market.
Its outlook contrasts sharply with bitter U.S. rival Boeing (BA: Research, Estimates), which announced plans to cut up to 30,000 jobs in response to a global economic slowdown and the terrorist attacks on the U.S. last week.
The European Aeronautics, Defence and Space Company (EADS), which owns 80 percent of Airbus, expects to post a 15 percent increase in earnings before interest and tax and 20 percent revenue growth in 2001.
Amsterdam-based EADS also forecast an operating margin – the percentage difference between sales and costs -- of 10 percent in 2004.
"We believe our strong business fundamentals and an array of new products and services both on civil and defence markets, as well as initiatives and actions we have already started allows us to maintain our 2004 operating margin target of 10 percent despite a highly uncertain market," EADS said.
The company outlined it forecast as it reported first-half earnings before interest and tax (EBIT) rose 38 percent as it delivered more commercial jets and changed the way it accounts for airliner maker Airbus.
EADS, which was created by the merger of Aerospatiale Matra of France, Germany's DaimlerChrysler Aerospace and Casa of Spain, said EBIT rose to  764 million ($708 million) from 533 million in the year earlier period. Analysts polled by Reuters had forecast EBIT of 777 million.
Net income was 1.66 billion, including 1.2 billion from Airbus's change to a integrated stand alone company from a profit-sharing partnership, compared to loss of 359 million.
EADS said Airbus was still planning to deliver 320 aircraft this year, but that "the new situation created by the September 11 terrorist attacks in the U.S. makes it difficult to formulate immediately a precise delivery forecast for 2002 and beyond."
It said Airbus had already decided in the summer to adjust for lower growth in production, and had decided to freeze the ramp-up of production at the present level of the yearly output at the "mid 300s in aircraft numbers."
"The A380 development will continue exactly as planned," EADS added.
EADS (PEAD) stock fell 4 percent to 10.69 in early Paris trade. The CAC 40 benchmark index fell 1.1 percent amid widespread economic gloom.
--from staff and wire reports 
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