Investor jitters over the health of underlying European Aeronautic Defence and Space Company (EADS) earnings due out today took the shine off a long-awaited international deal to refinance the delayed Airbus A400M military transport plane, analysts said.
The builder of Europe's over-budget military transporter said on Friday it would report a 2009 loss as it clinched a €3.5 billion (Dh17.59bn) bailout deal with buyer nations.
The deal aims to preserve 10,000 jobs but will leave the Airbus parent taking €1.8bn in fresh provisions for its share of the cost haemorrhage, according to a statement.
The charge was seen at the lower end of market expectations, but investors fretted after EADS said it would push the firm into the red at both operating and net income level for 2009.
In November, EADS had predicted earnings before interest and tax (Ebit) of €2bn excluding any such one-offs.
"It is positive that EADS has finally reached an agreement. The additional provisions of €1.8bn are around €200 million less than we had anticipated," said Markus Turnwald, analyst at DZ Bank in Frankfurt. "Nevertheless the underlying business seems to be running worse than expected. EADS has guided [for a pre-exceptional] Ebit... of €2bn. Now EADS expects the Ebit to be negative including the additional provisions of €1.8bn."
Analysts said EADS also faces potential charges against high production costs on its largest civil project, the Airbus A380 superjumbo. The company said in November that A380 costs were higher than expected and the financial impact was under review.
EADS also said future A400M cash flow – a key issue for company analysts – must be negotiated, but said all parties hoped to "mitigate negative cash impacts" as far as possible.
In January, EADS said it expected a drop of some four per cent in group sales to €41.7bn.
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