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Finance News<br />
17<br />
Boeing reports third-quarter revenues of US$24.3bn<br />
The Boeing Company has reported third-quarter revenue of US$24.3bn,<br />
with GAAP earnings per share of $3.06 and core earnings per share<br />
(non-GAAP) of US$2.72, reflecting strong deliveries, services and delivery<br />
mix, and overall solid execution.<br />
The company’s cash flow guidance is increased to US$12.5bn from<br />
US$12.25bn, driven by improved performance. Full year EPS guidance<br />
is increased to between US$<strong>11</strong>.20 and US$<strong>11</strong>.40 from US$<strong>11</strong>.10<br />
and US$<strong>11</strong>.30 and core earnings per share (non-GAAP) guidance<br />
is increased to between US$9.90 and US$10.10 from US$9.80 and<br />
US$10.00 driven by a lower-than-expected tax rate. Commercial Airplanes<br />
third-quarter revenue was US$15.0bn on planned production<br />
rates and delivery mix. Third-quarter operating margin increased to<br />
9.9%, reflecting higher 787 margins and strong operating performance<br />
on production programs, partially offset by additional cost growth of<br />
US$256m on the KC-46 Tanker program due to incorporating changes<br />
into initial production aircraft as the company progresses through latestage<br />
testing and the certification process.<br />
During the quarter, Commercial Airplanes delivered a record 202<br />
airplanes, including 24 737 MAX 8 airplanes. The production rate increased<br />
to 47 per month on the 737 program, and Boeing has confirmed<br />
plans to increase the 787 production rate to 14 per month in<br />
2019. Development on 777X is on track as production has begun on<br />
the first complete wing for structural test.<br />
Commercial Airplanes booked <strong>11</strong>7 net orders during the quarter. Backlog<br />
remains robust with nearly 5,700 airplanes valued at US$412bn<br />
Safran reports strong sales for third quarter and first nine<br />
months <strong>2017</strong><br />
Safran’s reported third-quarter <strong>2017</strong> adjusted revenue was €3,815m,<br />
up 8.5% on a reported basis year-on-year. Adjusted revenue increased<br />
<strong>11</strong>.3% on an organic basis. Adjusted revenue in the first nine months of<br />
<strong>2017</strong> was €<strong>11</strong>,853m, an increase of 3.0% on a reported basis, up 5.1%<br />
on an organic basis, compared to 2016. In the third-quarter <strong>2017</strong>, civil<br />
aftermarket increased 14.5% in USD compared to 2016 driven notably<br />
by service activity and spare parts for CFM56 engines. In the first<br />
nine months of <strong>2017</strong>, civil aftermarket grew 10.4% in USD. (€1.00 =<br />
US$1.18 at time of publication.)<br />
IAG reports another strong quarter with operating profit<br />
up 20.7%<br />
International Consolidated Airlines Group (IAG) presented Group consolidated<br />
results for the nine months to September 30, <strong>2017</strong>. The Group<br />
posted third-quarter operating profit of €1,455m before exceptional<br />
items (2016: €1,205m). Passenger unit revenue for the quarter was<br />
up 0.7%, up 2.2% at constant currency. Operating profit before exceptional<br />
items for the period of nine months to September 30, <strong>2017</strong> was<br />
€2,430m (2016: €1,915m), up 26.9%. Cash of €7,523m at September<br />
30, <strong>2017</strong> was up €1,095m on 2016 year end. Adjusted net debt to<br />
EBITDAR improved by 0.4 to 1.4 times. Willie Walsh, IAG Chief Executive<br />
Officer, said: “We’re reporting another strong quarter with an operating<br />
profit up 20.7 percent to €1,455 million before exceptional items.<br />
All our companies performed well. Passenger unit revenue was up 2.2<br />
percent at constant currency boosted by improvements in the Spanish<br />
and Latin American markets. Our commercial performance was good<br />
despite underlying disruption from severe weather and terrorism. IAG<br />
Cargo improved in the quarter due to stronger Asia Pacific demand<br />
compared to last year.”<br />
Embraer posts third-quarter net income of US$<strong>11</strong>0m<br />
During the third quarter <strong>2017</strong>, Embraer delivered 25 commercial jets<br />
and 20 executive jets (13 light and 7 large). The Company’s firm order<br />
backlog at the end of the third quarter was US$18.8bn, representing an<br />
increase from the US$18.5bn reported at the end of 2Q17. Consolidated<br />
revenues were US$1,310.4m, representing a decline of 13.5%<br />
compared to the third quarter in 2016, due to lower deliveries in the<br />
Commercial Aviation and Executive Jets segments. Adjusted EBIT and<br />
Adjusted EBITDA margins were 5.3% and 10.9%, respectively. Adjusted<br />
EBIT and Adjusted EBITDA exclude US$3.6m in net non-recurring<br />
charges in the third quarter <strong>2017</strong>. Net income attributable to Embraer<br />
shareholders and Earnings per ADS were US$<strong>11</strong>0.0m and US$0.60,<br />
respectively. Adjusted Net income (excluding the impact of FX-related<br />
non-cash deferred income tax and social contribution and non-recurring<br />
items) for the quarter was US$75.2m, representing Adjusted Earnings<br />
per ADS of US$0.41. Embraer expects 2018 to be a transition year<br />
due to the entry into service of the first E2 model, the E190-E2, combined<br />
with a still flattish market for Executive Jets and Defense & Security.<br />
In this transition scenario of ramp-up costs for the initial E2 deliveries,<br />
the Company releases 2018 Outlook for total revenues of US$5.3 to<br />
US$6.0bn, with deliveries of 85 to 95 jets in Commercial Aviation and<br />
105 to 125 jets in Executive Jets. Consolidated EBIT margin is expected<br />
to be within a range of 5.0% to 6.0%, and Guidance for Free Cash Flow<br />
is for a usage of US$150m or better for 2018.<br />
Zeitfracht and Nayak take over airberlin maintenance unit<br />
airberlin’s maintenance unit, has been acquired by family-owned Zeitfracht<br />
and maintenance group Nayak, for a sum as yet undisclosed. This<br />
should save approximately 300 jobs. Zeitfracht is also buying Air Berlin’s<br />
cargo marketing unit. The remaining 550 maintenance employees who<br />
will not be going to Zeitfracht will be taken on by a so-called ‘transfer<br />
company’ which will take on a total of approximately 1,200 redundant<br />
Air Berlin ground handling staff and will subsequently look to source<br />
new employment opportunities for them. This figure is still appreciably<br />
lower than the 4,000 staff unions had hoped would be taken care of.<br />
MTU Aero Engines presents nine-month results and raises<br />
earnings forecast<br />
In the first nine months of <strong>2017</strong>, MTU Aero Engines AG saw its revenues<br />
increase by 10% to €3,745.4m (1-9/2016: €3,401.3m). The group’s<br />
operating profit increased by 14% from €393.8m to €450.6m, improving<br />
the EBIT margin from <strong>11</strong>.6% to 12.0%. Earnings after tax rose by<br />
17% to €320.4m (1-9/2016: €273.4m). “Based on these results and the<br />
positive effects on earnings that we now expect to derive from our product<br />
mix, we are able to raise our earnings forecast for this year,” said<br />
Reiner Winkler, CEO of MTU Aero Engines AG. “By year-end, we now<br />
expect adjusted EBIT to grow to around €600m and net income to reach<br />
around €420m.” MTU’s original forecast was adjusted EBIT of around<br />
€560m (2016: €503.0m) and adjusted net income of around €390m<br />
(2016: €345.4m). MTU has aligned its revenue forecast to reflect exchange<br />
rate changes and now expects to generate revenues of around<br />
€5.1bn instead of around €5.3bn (2016: €4.7327bn).<br />
<strong>AviTrader</strong> <strong>MRO</strong> - November <strong>2017</strong>
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