EADS quarterly profit beats forecasts

By Tim Hepher and James Regan

PARIS/FRANKFURT (Reuters) - Airbus parent EADS (EAD.PA: Quote, Profile, Research) rolled out stronger quarterly profits than expected and stuck to its forecasts for the year despite fresh delays to its A380 superjumbo, giving its shares a sharp boost on Wednesday.

The European group said revenue was lifted by higher production of passenger jets and helicopters and a down-payment on the A400M European military airlifter as it met a key development test, though that project is also running late.

Analysts had expressed concerns over whether EADS would be able to stick to its forecast of a dramatic rise in operating profit in 2008 even before it announced more delays to the world's largest passenger plane, the A380, on Tuesday.

But it stood by its main forecasts and raised a cashflow target, even though the main source of worry for Europe's largest aerospace group, the weakness of the dollar against the euro, showed no signs of abating in the first quarter.

EADS is reaping the benefit of three years of record or near-record orders for Airbus and rival Boeing (BA.N: Quote, Profile, Research) as many airlines opt for more fuel-efficient fleets to escape high oil prices and as aviation prospers in Asia and the Middle East.

Cash advances on the orders have eased the company's finances and EADS announced it was sitting on an 8 billion euro ($12.4 billion) pot of cash at the end of the first quarter, preserving much-needed firepower as it restructures to cope with the weak dollar and a widely predicted industry downturn.

EADS reported a first-quarter operating profit of 769 million euros, up from 88 million a year earlier, and confirmed its target of 1.8 billion euros for the full year.

It reported a 10 percent rise in quarterly revenue to 9.85 billion euros and net profit of 285 million euros, compared with a 10 million euro net loss a year earlier.