 "EADS to adopt Airbus name to reflect heft of civilian aircraft")
European Aeronautic, Defence & Space Co will adopt the Airbus name for the entire group to reflect the dominance of commercial aircraft and plans to combine defence and space operations to help weather shrinking demand.
EADS, which also reported earnings that beat analyst estimates, said it will reorganise into three divisions, including civil aircraft, helicopters and defence and space. EADS rose 3.3 per cent to euro 45.75, the most since it was formed and began trading in 2000.
Adopting its most recognisable brand for the entire group ends a decade-long attempt to create a balance between Airbus and other operations, most recently with last year's proposed merger with BAE Systems Plc that failed amid government opposition. Chief Executive Officer Tom Enders has since reshaped the shareholder structure to curtail political influence, and has vowed to make EADS more investor-driven. "The renaming simply gathers the entire company under the best brand we have," Enders said. Moving defence and space together will create a 'one-stop shop for the air forces of the world'."
Airbus contribution
Earnings before interest and tax, goodwill impairment and exceptionals rose to euro 887 mn ($1.18 bn) from euro 724 million a year earlier, as sales increased three per cent to euro 13.95 bn. Analysts had estimated earnings of euro 803.7 mn, according to a Bloomberg survey.
Airbus contributed euro 637 million to earnings, up from euro 391 million a year earlier as its sales rose two per cent to euro 9.74 billion. Gross commercial aircraft orders will 1,000 aircraft, with deliveries at 600 to 610 units, EADS said.
The company maintained its outlook for Ebit before one-offs of euro 3.5 billion and earnings per share before one-off of about euro 2.50, prior to the continuing share buyback.
The commercial aircraft division contributed about 70 per cent of sales, which Enders said underscores the importance of the business in driving growth. With the restructuring, EADS has shed its earlier ambition to create an equal balance between Airbus and the other businesses in the group, he said.
Welcome strength
"We welcome the strength and success of Airbus," Enders said on a call with journalists.
Enders said the A350 wide-body programme, while facing its most challenging period yet, is performing well after 92 hours of flight tests. The plane will fly 2,500 hours in total before the tests are complete. They must wrap up by next summer to get the aircraft into commercial service by autumn of 2014. The reorganisation announced on Wednesday underlines EADS's commitment to defence and space for the long term, and the restructuring is aimed at cutting costs in the absence of new large defence projects in Europe for at least the next decade, Enders said.
EADS's cash position at the end of June was euro 5.9 billion after taking into account euro 1.8 billion already consumed to fund the share buyback program and the 2012 dividend payment of euro 468 million. Besides helping EADS better present its array of military and space products in international markets, the restructuring is also aimed at tackling costs, EADS said. The group gave no details on potential job cuts, while saying workers council consultations and various other approvals will be required before the overhaul can come into effect.
Munich base
EADS will examine what charges it may have to take before year-end to absorb the costs of integrating the defence and space activities as it targets a phased implementation of the reorganisation due to start on January 1 and completed in the second half of next year.
The changes are part of an effort to reshape a company that relies increasingly on civil airliners for growth as its military business suffers from European budgetary constraints. With the new defence and space unit remaining in Munich, EADS keeps one of three major businesses anchored in Germany, where government resistance, partly based on the absence of a planned local base, led EADS to abandon the BAE merger effort.
EADS, which also reported earnings that beat analyst estimates, said it will reorganise into three divisions, including civil aircraft, helicopters and defence and space. EADS rose 3.3 per cent to euro 45.75, the most since it was formed and began trading in 2000.
Adopting its most recognisable brand for the entire group ends a decade-long attempt to create a balance between Airbus and other operations, most recently with last year's proposed merger with BAE Systems Plc that failed amid government opposition. Chief Executive Officer Tom Enders has since reshaped the shareholder structure to curtail political influence, and has vowed to make EADS more investor-driven. "The renaming simply gathers the entire company under the best brand we have," Enders said. Moving defence and space together will create a 'one-stop shop for the air forces of the world'."
More From This Section
EADS rose euro 1.48 in Paris, and traded at euro 45.1356 as of 1:00 pm. The stock has gained 52 per cent this year, while Boeing Co has advanced 40 per cent.
Airbus contribution
Earnings before interest and tax, goodwill impairment and exceptionals rose to euro 887 mn ($1.18 bn) from euro 724 million a year earlier, as sales increased three per cent to euro 13.95 bn. Analysts had estimated earnings of euro 803.7 mn, according to a Bloomberg survey.
Airbus contributed euro 637 million to earnings, up from euro 391 million a year earlier as its sales rose two per cent to euro 9.74 billion. Gross commercial aircraft orders will 1,000 aircraft, with deliveries at 600 to 610 units, EADS said.
The company maintained its outlook for Ebit before one-offs of euro 3.5 billion and earnings per share before one-off of about euro 2.50, prior to the continuing share buyback.
The commercial aircraft division contributed about 70 per cent of sales, which Enders said underscores the importance of the business in driving growth. With the restructuring, EADS has shed its earlier ambition to create an equal balance between Airbus and the other businesses in the group, he said.
Welcome strength
"We welcome the strength and success of Airbus," Enders said on a call with journalists.
Enders said the A350 wide-body programme, while facing its most challenging period yet, is performing well after 92 hours of flight tests. The plane will fly 2,500 hours in total before the tests are complete. They must wrap up by next summer to get the aircraft into commercial service by autumn of 2014. The reorganisation announced on Wednesday underlines EADS's commitment to defence and space for the long term, and the restructuring is aimed at cutting costs in the absence of new large defence projects in Europe for at least the next decade, Enders said.
EADS's cash position at the end of June was euro 5.9 billion after taking into account euro 1.8 billion already consumed to fund the share buyback program and the 2012 dividend payment of euro 468 million. Besides helping EADS better present its array of military and space products in international markets, the restructuring is also aimed at tackling costs, EADS said. The group gave no details on potential job cuts, while saying workers council consultations and various other approvals will be required before the overhaul can come into effect.
Munich base
EADS will examine what charges it may have to take before year-end to absorb the costs of integrating the defence and space activities as it targets a phased implementation of the reorganisation due to start on January 1 and completed in the second half of next year.
The changes are part of an effort to reshape a company that relies increasingly on civil airliners for growth as its military business suffers from European budgetary constraints. With the new defence and space unit remaining in Munich, EADS keeps one of three major businesses anchored in Germany, where government resistance, partly based on the absence of a planned local base, led EADS to abandon the BAE merger effort.