October 23, 2018 / 6:14 PM / a month ago

UPDATE 1-Safran keeps targets as Q3 sales beat forecasts

(Adds details, quotes)

PARIS, Oct 23 (Reuters) - France’s Safran posted stronger than expected third-quarter sales and said it was “well on track” to meeting full-year goals with the help of accelerating production of a new jet engine and stability at recently acquired Zodiac Aerospace.

The company, which absorbed troubled interiors supplier Zodiac in February to become the world’s third-largest aerospace contractor, said Zodiac was generating sales as planned as it continued to emerge from a three-year production crisis.

Safran also reaffirmed a pledge to deliver 1,100 LEAP jet engines co-produced with General Electric in 2018, and said it continued to see above-average aftermarket growth.

“We’ll do everything we can to deliver those 1,100 engines divided in the most objective way possible between Airbus and Boeing,” Chief Executive Philippe Petitcolin told reporters.

Safran, which also makes military systems, said third-quarter revenues grew 11.4 percent to 5.39 billion euros after stripping out the Zodiac acquisition and currency swings.

Analysts were on average expecting revenues of 5.22 billion, according to an Inquiry Financial poll for Reuters.

The LEAP engine powers the whole Boeing 737 MAX family and about half of the Airbus A320neo series, with the rest provided by Pratt & Whitney, whose parent United Technologies also reported stronger-than-expected numbers on Tuesday.

Sales at UTC’s Pratt & Whitney aircraft engines business jumped about 24 percent to $4.79 billion in the third quarter.

Executives say LEAP deliveries are running about a month behind schedule, a gap which has remained fairly constant in recent months but which could narrow as production for the Airbus version of the jet reaches full speed next year.

Production for Boeing, whose 737 MAX jet entered service about a year behind its Airbus equivalent and for which there is no engine competitor, will continue to ramp up during 2019.

Petitcolin welcomed a landmark order earlier this month for Cessna’s Citation Hemisphere jet, which delivered a boost to Safran’s troubled Silvercrest engine after another planemaker, Dassault Aviation, abandoned the engine over development delays.

Safran hopes to find other planemakers ready to adopt the engine for the promising Super-Mid-Sized business jet market, but no moves are expected in the short term, Petitcolin said. (Reporting by Tim Hepher, Cyril Altmeyer; Editing by GV De Clercq)

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