Airbus provisioning pulls down EADS Q1 profits

London: European aerospace and defense major EADS has reported a first-quarter net loss, mainly due to the continued restructuring of its Airbus unit. The company reported a loss of 10 million euros ($13.5 million), or 0.01 euro a share, as against a profit of 522 million euros, or 0.66 euro a share, in the same period last year.

Earnings before interest, tax and depreciation, or EBIT, amounted to 89 million euros, down from 791 million euros a year earlier, reflecting a provision of 688 million euros for the so-called "Power 8" restructuring at Airbus and also for costs to support Airbus's flagship A380 programme.

Sales went down marginally to 9 billion euros from 9.1 billion euros, thanks mainly to a weakness of the dollar against the euro even as the company continues to deliver a high number of aircraft.

EADS, however, cautioned that Airbus would post another "substantial" loss in 2007, mainly due to Power 8, support for the A380, potential launch charges for the new A350XWB, higher spending on research and development and from the impact of the worsening exchange rate between the dollar and the euro.

Sales at Airbus rose 4% to 6.4 billion euros, mainly due to an upswing in the single-aisle business. Airbus has increased production of its best-selling single-aisle A320 aircraft this year. It has booked gross orders for 134 new aircraft in the quarter, which is up from 90 a year ago.

At Eurocopter, sales increased 2% to 671 million euros and quarterly EBIT rose 18% to 33 million euros, thanks to a growth in customer services and increased delivery of helicopters.

Astrium, EADS' space division, posted sales of 629 million euros, up by 28%.