Government Subsidies Fail to Prevent 85% Profit Drop at Airbus

[onedomino]

EADS (Airbus) profit fell 85 percent in the 2nd quarter. Socialism is clueless when it comes to providing the incentives and competition necessary to make money. Meanwhile unsubsidized Boeing's new 787 aircraft is setting sales records. Boeing stock is up 21 percent while EADS is down 12.

EADS Second-Quarter Profit Falls on A380, A350 Costs
By Andrea Rothman
Bloomberg News

complete article: http://seattletimes.nwsource.com/html/boeingaerospace/2003806802_webeads26.html

European Aeronautic Defence & Space Co., parent of planemaker Airbus SAS, said second-quarter profit fell 85 percent because of delays in the A380 superjumbo jet and a redesign of the A350.

Net income dropped to 81 million euros ($111 million), or 10 cents a share, from 534 million euros, or 67 cents, a year earlier, Munich- and Paris-based EADS said in a statement today. Sales fell 4 percent to 9.5 billion euros. (Boeing net income in the 2nd quarter was more than $1 billion.)

Setbacks at Airbus, the world's biggest maker of commercial planes, contrast with gains at Boeing Co., which yesterday reported profit that beat analysts' estimates. Boeing stock is up 21 percent so far this year, while EADS has fallen 12 percent as the European company struggled to deliver the 555-seat A380 and develop the smaller A350 (the competitor to the 787; it will not be available until 2013 at the earliest). EADS also said today delays on a military transport plane may reduce profit.

"We haven't seen the end of the bad news," said Olivier Esnou, an analyst at Exane BNP Paribas in Paris who has an "underperform" rating on EADS shares. "The second half will continue to be hit by one-off charges for areas including the A400M, and A350, and the costs of implementing Power8," a cost- cutting program.

Shares of EADS fell as much as 60 cents, or 2.6 percent, to 22.47 euros, and were down 0.9 percent at 2:31 p.m. in Paris.