Airbus Reports Rise in Profit

Airbus Group SE on Friday reported a 5% rise in second-quarter profit even as the A400M military transport plane program, which has repeatedly been a drag on earnings, once again impaired the European plane maker's financial results.

The maker of A380 superjumbos and Ariane 5 rockets said net income for the three months ended June 30 was €732 million ($801 million), compared with €696 million in the same period last year.

The plane maker booked a €290 million charge against earnings on the A400M program two months after the first crash of one of the planes in Spain killed four of six company employees onboard. The fleet was briefly grounded and deliveries halted, though those restrictions have since been lifted.

Airbus sales in the April through June period rose 16% to €16.8 billion as the company delivered several more jetliners that in last year's second quarter. Airbus and rival Boeing Co. are delivering ever more planes backed by record backlog of orders as airlines seek to replace older, less fuel efficient planes with newer ones.

"We continue to see healthy commercial momentum across the portfolio as shown by the major contracts announced at June's Paris Air Show," Chief Executive Tom Enders said, adding "we are focused on operational priorities, including A350 and A400M ramp-up, cost control and deliveries plus the A320neo transition, as we strive to further enhance profits and cash."

Airbus has struggled with development and production of the A400M program, which has caused the project to be years late and cost billions of dollars more than expected. Problems have ranged from the aircraft's large turbo-propeller engine to some of its complex systems, causing the program to fall about four years behind plan.

The European plane maker has secured 174 orders for the A400M, with Malaysia the only customer beyond a group of six European countries and Turkey backing its development. Without additional deals Airbus will lose money on the project, the company has said.

Airbus's earnings before interest and taxes excluding some one-time items, a closely watched benchmark, advanced 15% to €1.2 billion in the second quarter.

The company confirmed its full-year earnings guidance for an increase in sales and higher operating income excluding mergers and acquisitions. It also said it would still this year deliver the first A320neo, an upgrade of its popular single-aisle plane, despite a disruption in flight trials that temporarily idled two test planes with component problems on the engine made by United Technologies Corp.'s Pratt & Whitney engine unit.

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