Airbus Reports Higher First-Quarter Profit -- Update

By Robert Wall 

LONDON-- Airbus Group NV on Thursday reported a rise in first-quarter earnings bolstered by the sale of a stake in French combat jet maker Dassault Aviation SA, even as the underlying business began 2015 slowly.

Net income for the period was EUR792 million ($880 million) compared with EUR439 million a year earlier, the Toulouse-based plane maker said in a statement.

The company's earnings in the period were boosted by a EUR697 million net gain from the sale of a 17.5% stake in Dassault Aviation, it said.

"We had a good start into 2015, with a solid operational performance and improved cash generation, further supported by asset sales," Chief Executive Tom Enders said.

Sales declined 4% to EUR12.1 billion, the world's second-largest maker of commercial jetliners said. Airbus delivered 134 jets in the first three months of the year compared with 141 in the year prior period. Sales should rebound with deliveries of commercial jetliners weighted toward the second half as Airbus targets more plane shipments this year than last.

The European plane maker's closely watched earnings before interest and taxes excluding some one-time items retreated 7% to EUR651 million.

Earnings at the key commercial jetliner unit rose 8% to EUR569 million before one-time items.

Airbus's helicopter division reported a 10% fall in earnings as widely expected because of the mix of rotorcraft delivered. The company said a cost reduction plan limited the retrenchment. The defense and space unit's earnings rose EUR5 million to EUR90 million.

CEO Mr. Enders said the company remains on track to meet full-year targets. That includes meeting a long-promised commitment t start delivering A380 superjumbos from this year which no longer lose money.

The Dassault Aviation transaction also lifted free cash flow to EUR452 million after a EUR2.1 billion outflow in the year-ago period.

Airbus last year announced plans to unload its stake in Dassault Aviation inherited at the time the Franco-German aerospace company was created. Airbus still owns around 23% of Dassault's shares.

"We will review capital allocation towards the end of the year," Mr. Enders said. Airbus next month will seek shareholder approval to buy back an extra 10% of its stock in addition to the regular approval for a similar amount.

Airbus has promised investors it will try to improve cash generation and on Thursday confirmed its target of reaching break-even on that measure excluding mergers and acquisitions. Stripping out the Dassault Aviation transaction, Airbus would have had a EUR1.1 cash outflow in the first quarter.

Write to Robert Wall at [e-mail]

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