EADS shares take off despite losses
Tuesday 17 November 2009
EADS, the European aerospace giant that owns Airbus, reported its first quarterly loss for two years yesterday, blaming uncertainty about aircraft sales and the weak US dollar.
The group that makes the A380 super jumbo said that it had slipped to a deficit of €87m (£78m) in the three months between July and September, after profits of €679m a year earlier.
Most worryingly for investors, however, was the company's suggestion that "ongoing uncertainty" over the A380 and its A400M military transport aircraft left it unable to predict the impact on its full-year numbers.
EADS, which employs nearly 10,000 in the UK, has struggled after a number of orders for the A380 were cancelled, despite strong orders from several Middle Eastern and Asian airlines.
The group has also been beset with rising costs and technical problems relating to the A400M. Last month the South African government cancelled an order for eight of the aircraft.
EADS prices in dollars and has suffered as the euro has made gains against the greenback. "It is indeed probably one of our biggest headaches today – the level of the euro/dollar," said EADS's finance director, Hans Peter Ring.
Despite the company's problems, its shares took off yesterday, closing up 4.5 per cent at €13.75. "The company's cash performance is fabulous; they deserve an enormous amount of credit for that," said Sandy Morris, an analyst at RBS. Net cash stood at €8.1bn at the end of the third quarter.
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