October 27, 2017 / 5:03 AM / in a year

Aerospace group Safran revises up revenue target as Q3 growth quickens

PARIS, Oct 27 (Reuters) - French aerospace company Safran raised its revenue forecast for 2017, after sales growth accelerated in the third quarter.

The maker of aircraft engines, landing gear and military optronics said adjusted revenue grew 8.5 percent to 3.815 billion euros ($4.4 billion) in the quarter, led by its propulsion business as well as a pick-up in its defence business. Sales rose 11.3 percent on an underlying basis.

Safran raised its forecast for adjusted revenue growth in 2017 to 3 percent from 2-3 percent, and confirmed other targets including operating income close to the 2016 level.

But it said its 2017 operating earnings faced headwinds of 350-400 million euros from the transition to the new LEAP jetliner engine: a figure which it described as “slightly higher” than previous assumptions.

The widely-watched civil aftermarket grew 10.4 percent in dollar terms in the first nine months, including 14.5 percent year-on-year growth in the third quarter.

Safran said it was meeting targets for the new LEAP aircraft engine, co-produced with General Electric through their CFM venture, but softened language used to describe its goal.

In April, it had predicted around 500 LEAP deliveries in 2017. Safran and GE talked in the summer of 450-500 deliveries and in its latest release, Safran said it was on course for “over 450”.

GE said last week CFM had delivered 111 LEAP engines in the third quarter including 23 retrofitted for Boeing following a turbine disk problem earlier in the year. Safran said in July it had found a quality issue with some LEAP engines for Airbus.

Safran said it was working on a new timetable for the Silvercrest business jet engine, whose certification has been delayed by extra development work.

Dassault Aviation said this month that its Falcon 5X jet, which had already been delayed to 2020, would be postponed again after Safran identified problems with the high-pressure compressor.

$1 = 0.8595 euros Reporting by Tim Hepher and Cyril Altmeyer; Editing by Sudip Kar-Gupta

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