January 18, 2007

THEY'D BE BETTER OFF JUST MAKING BALLOONS:

Airbus A380 costs are ballooning: Despite some positive news at Airbus, parent company EADS issued a profit warning as costs soar for its A380 airplane (LAURENCE FROST, 1/18/07, Associated Press)

The two-year delay to the Airbus A380 is proving costlier than expected, parent company EADS said Wednesday in a profit warning that sent shares lower as the aircraft maker confirmed it had lost its five-year lead in orders to Boeing. [...]

Shortly before the orders announcement, EADS said an unspecified fourth-quarter accounting charge tipped Airbus into an operating loss for 2006 that will ''roughly balance'' earnings before interest and tax from other divisions. Full-year results will be released March 9.

Hans Peter Ring, chief financial officer for both EADS and Airbus, said the ''bulk of the charges'' were previously disclosed but had now been brought forward -- including costs linked to the A380 setbacks and restructuring plans.

''We're accepting a bigger hit in 2006 to prepare a better future,'' Ring said, declining to provide any breakdown of the losses. The A380 problems would wipe 4.8 billion ($6.2 billion) from 2006-2010 profit, EADS said last October.

In its statement, however, EADS also blamed the Airbus loss on new A380-related costs that were ''not originally envisaged.''


The great thing is that since it's basically just a jobs program the costs can never go so high nor the number of orders so low that they'll kill it.

Posted by Orrin Judd at January 18, 2007 8:51 AM
Comments

Red ones?

Posted by: Mike Earl at January 18, 2007 9:36 PM
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