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Safran Q1 Revenue Climbs 9.5%, Ups Full Year Revenue View; Stock Rises

4/23/2013 5:52 AM ET

Safran SA (SAFRF.PK,0IU8.L) Tuesday reported a 9.5 percent growth in first-quarter adjusted revenue, with solid growth in Aerospace activities. The technology company that makes aircraft and rocket engines as well as propulsion systems lifted its full year revenue outlook. The stock is gaining more than 4 percent in Paris.

Chairman and CEO Jean-Paul Herteman said, ''Safran recorded solid revenue growth in the first quarter, notably in aerospace with continued and robust OE production growth and solid aftermarket momentum. Since the beginning of the year, our global civil aftermarket performed satisfactorily with 10% growth over an already strong first quarter of 2012.''

Total group revenue advanced 9.5 percent to 3.404 billion euros from last year's 3.108 billion euros. Revenues are on an adjusted basis.

Revenue advanced 9.6 percent on an organic basis, as a result of good momentum in Aerospace, both on OE volumes and aftermarket activity.

Aerospace Propulsion revenue increased 15.5 percent to 1.831 billion euros, primarily driven by strong growth in civil original equipment and spares, both for CFM56 and high-thrust engines.

Aircraft Equipment revenue rose 4.6 percent to 924 million euros, primarily attributable to the landing gear business, with higher deliveries notably on Boeing 787, A330 and A320 programs coupled with a growing MRO activity.

Defense revenues slid 1 percent to 304 million euros. According to the company, solid revenue growth in the avionics activity was partially offset by softer revenue in Optronics in the backdrop of U.S. military budget contraction.

Security revenues were 3.6 percent higher at 344 million euros. The segment witnessed renewed momentum in biometric identity solutions with additional billings in countries like Egypt and Kenya which suffered from some delays in the latter part of 2012.

Looking ahead to the full year, the company now expects adjusted revenue to increase by a percentage in the mid-to-high single digits, compared to the previous projection of 5 percent. The upgrade is based on growth in the first-quarter of 9.5 percent and the contribution of the newly-acquired Goodrich business.

Adjusted recurring operating income is still expected to grow by a percentage in the mid-teens, the company noted.

The stock is currently gaining 4.50 percent in Paris at 36.58 euros.

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by RTT Staff Writer

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