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Airbus Q2 Net Profit Down, EBIT Climbs, Backs FY18 View; Stock Up

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Shares of Airbus Group SE (EADSF.PK,EADSY.PK) were gaining around 5 percent in Paris trading after the aerospace and defense major reported Thursday higher second-quarter EBIT, a key earnings metric, with strong revenues. Net profit, meanwhile, dropped sharply on negative currency and higher tax. Further, the company maintained its fiscal 2018 view.

Airbus Chief Executive Officer Tom Enders, said, "A320neo aircraft deliveries picked up during the second quarter but challenges remain to meet our full year targets. Market demand remains strong for the expanded Airbus portfolio that now includes the A220 at the smaller end."

For the second quarter, net income decreased 69 percent to 213 million euros from last year's 682 million euros. Earnings per share were 0.27 euros, down from 0.88 euros in the previous year.

Earnings for the quarter before interest and tax or EBIT, however, climbed 45 percent to 921 million euros from 636 million euros last year.

Quarterly adjusted EBIT surged 101 percent from last year to 1.15 billion euros, reflecting the strong improvement from the A350 XWB programme. A320neo ramp-up and transition as well as solid programme execution at Airbus Helicopters and Airbus Defence and Space also benefited the results.

Quarterly revenues increased 8 percent to 14.85 billion euros from last year's 13.73 billion euros. The results were benefited by commercial aircraft deliveries, partly compensated by perimeter changes at Airbus Helicopters and Airbus Defence and Space.

Further, the company maintained its guidance for the full year. Before M&A, the Company expects EBIT Adjusted of approximately 5.2 billion euros in 2018. Including A220, the Company expects EBIT Adjusted to be approximately 5.0 billion euros.

Airbus targets to deliver around 800 commercial aircraft, without the A220 Family. Around 18 A220 deliveries are targeted for H2.

In 2018, the company expects the net cash impact of the A220 integration to be largely covered by the funding arrangement as laid out in the terms of the C Series Aircraft Limited Partnership, meaning limited cash dilution.

In Paris, Airbis shares were trading at 110 euros, up 4.9 percent.

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