Paris: Airbus parent EADS’sfirst-quarter profit plunged by almost two-thirds, weighed down by weakening currency hedge rates and persistent cost worries on its A380 superjumbo, it said on Friday.
Europe’s largest aerospace group reaffirmed its outlook for the year as it posted a 64% drop in operating profit to €83 million ($105 million), missing average market expectations.
The figures included a razor-thin profit of €7 million for the Airbus commercial planemaking unit, down from 89 million a year earlier, after a 400 million knock from deteriorating currency rates.
“In addition, the A380 continues to weigh significantly on underlying performance,” EADS said in a statement.
Airbus has said it is struggling to contain costs due to the high level of customisation on the world’s largest airliner.
EADS net profit fell 39%t to €103 million. Sales rose 6% to 8.95 billion, in line with expectations.
Analysts had on average forecast first-quarter operating income down 58% to €98 million and a net profit of 17 million, according to a Reuters poll.
Chief executive Louis Gallois said recent financial market turbulence signalled “the crisis is not fully behind us”.
The euro has weakened as Europe grapples with growing concerns over sovereign debt.
Gallois said EADS — heavily dependent on revenue it receives in dollars — should benefit in the longer term if the trend is confirmed. But in the short run analysts have expressed concerns over the declining value of EADS hedge rates.
At $1.25 on Friday, the euro has fallen 12% since the start of the year. EADS shares have risen 10% in the same period, compared with a flat overall market. EADS shares closed at €15.53 on Thursday.
The results are the first since EADS took €1.8 billion in charges in the fourth quarter for delays to its A400M army plane.
EADS said profits would depend on its ability to execute on a trio of big projects — the military A400M, the civil A380 and the mid-sized A350 being built to compete with rival Boeing’s 787 Dreamliner.
Boeing last month posted a narrower-than-expected fall in first-quarter profits but cut its 2010 forecast due to the impact of US healthcare reforms.