Aerospace group EADS more than trebled its operating profit in the first quarter to 657 million euros ($851 million), well above market forecasts and swept higher by Airbus, the world's biggest passenger jetmaker. Net profit at Europe's largest industrial concern rose sharply to 328 million euros and revenues were lifted by one billion euros from a year earlier to 7.0 billion euros, helped also by a recovery in the dollar, EADS said on Monday. But in a sign that sky-high profits may not set the tone for the rest of the year, especially in terms of its ability to manage its $12 billion net currency exposure, EADS stuck cautiously to its target for 2005 operating profit up 6 percent.
A Reuters editorial survey of 11 analysts had pointed to first-quarter earnings before interest and tax of less than 344 million euros and sales of 6.78 billion euros.
EADS shares rose as much as 2.1 percent to a three-week high of 23.19 euros on the profit news, before halving the gains amid concerns over the group's failure to name a new Airbus chief and evidence that currency hedging benefits would soon deteriorate.
Reports of yet another internal succession dispute, and a counter-attack for plane orders by Boeing, have taken the shine off preparations for an EADS shareholder meeting on Wednesday, when Airbus boss Noel Forgeard will be crowned co-CEO of EADS.
EADS Chief Financial Officer Hans Peter Ring denied the failure to announce a rapid replacement for Forgeard, which follows a bitter feud over his promotion, betrayed new tensions.
"The final decision has not been made as of today," Ring told financial analysts. "We have strong candidates and will take the time (needed) to find the right choice. Discussions are really constructive and in a good spirit."
EADS said its first-quarter operating profit had improved across all its divisions, mainly at Airbus which delivered 87 planes in the first quarter compared with 67 in the same period a year earlier and 70 by rival Boeing. Airbus operating profit swelled to 628 million euros from 224 million euros in the same quarter last year.
EADS reaffirmed a 2005 target of more than 2.6 billion euros operating profit, based on delivering 350 to 360 Airbus planes, and group sales of 33 billion euros. Ring said 360 aircraft looked nearest the mark but some analysts expect closer to 400.
First-quarter margins benefited from a stronger dollar, the currency in which aircraft are sold, and a legacy of favourable currency hedges as well as lower research and development costs.
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