Mixed Financial News Breaks at EADS and Boeing
At face value, Europe’s EADS group appeared to come off slightly worse than its U.S. rival Boeing from financial results announced in late July. EADS reported a 23-percent drop in operating profits for the first half of this year, compared with a 22-percent decline at Boeing over the same period.
However, Boeing’s second-quarter net income actually showed an unexpected 17-percent boost versus the same year-ago period, rising to $998 million, while second-quarter revenues for the group were up by 1 percent at $17.2 billion. Airbus’s first-half revenues were up by 2 percent at €20.195 billion ($28.273 billion).
But what caught the eye of many financial analysts in Boeing’s July 22 announcement was the acknowledgement that the worsening delays in bringing the 787 to market might mean that the program will not turn a profit for at least the first two years after deliveries finally begin.
Meanwhile, EADS has said it will continue to defend itself and its management against allegations of insider trading being probed by French financial authorities. On July 28, a report published by an independent examiner appointed by the Autorité des Marchés Financiers (AMF) recommended fines totalling €12.3 million ($17.2 million) for allegedly suspicious share-dealing that took place ahead of a June 2006 profits warning relating to delays of the A380 program at EADS subsidiary Airbus.
The recommended fines include a €5.45 million penalty against former Airbus co-chief executive Noel Forgeard and €3.6 million against its current chief commercial officer, John Leahy, as well as a €700,000 fine for EADS itself for alleged delays in supplying market information. The AMF’s sanctions committee will make a final ruling on the case by the end of this year.
The examiner’s report cleared current Airbus chief executive Tom Enders of any blame.