PARIS (AP) -- Airbus parent company EADS said Friday it rebounded to a profit in the third quarter thanks to lower costs for restructuring and fewer delays to aircraft programs. But it warned that continued setbacks in production of its military transporter will make achieving its full-year target challenging.
European Aeronautic Defence & Space Co. NV made a net profit of 679 million euros ($850 million) in the three months to September compared with a 776 million euro loss a year ago. Last year's earnings had been hammered by charges for delays to the Airbus A350 long-haul jet and the A400 military transporter, as well as by Airbus' so-called Power-8 restructuring plan.
Boeing's chief rival said its earnings in the quarter were held back by a 341 million euro ($427.1 million) charge against its A400 program, which the company said faces "further delays" stemming from problems with the aircraft's propulsion system.
In a statement, EADS Chief Executive Louis Gallois said EADS "is more determined than ever to get this complex program under control." But the jet maker warned that its target of achieving earnings before interest and tax (EBIT) of 1.8 billion euros ($2.25 billion) this year "excludes any additional impact for the A400M, due to the uncertainties of the program."
Speaking in a conference call with analysts, Chief Financial Officer Hans Peter Ring confirmed there would be more charges due to the A400M program. The magnitude of these additonal costs will be disclosed after an ongoing review process is completed, Ring said.
In the nine months to September, EADS reported EBIT of 2 billion euros ($2.5 billion) on sales of 29.4 billion euros ($36.8 billion).
The company said Airbus took in 737 new aircraft orders so far this year, taking the value of its order backlog to 401 billion euros ($502 billion), up 18 percent from a year earlier.
EADS also warned that falling air traffic -- hit by the global financial and economic crisis -- raised the risk that orders could be deferred or canceled. It said Airbus has limited its production of the A320 range of jets at 36 per month, suspending plans to increase production to 40 aircraft a month by 2010.
However the company reiterated its target of achieving revenue of more than 40 billion euros ($50 billion) and orders for 850 aircraft this year.
The company also announced a new cost savings plan dubbed "Future EADS" that aims to cut an additional 200 million euros ($251 million) in costs between 2011 and 2012. That comes on top of the 1 billion euros ($1.25 billion) in savings already budgeted for those years, and in addition to the Power-8 restructuring program that aims to shed 10,000 jobs and reduce annual spending by 2.1 billion euros ($2.63 billion) by 2010.
EADS shares got a lift from the company's reiterated guidance as well as its healthy free cash flow outlook for the year, at more than 2 billion euros ($2.5 billion), double its previous estimate. EADS shares closed up 3.7 percent at 12.31 euros ($15.61).
