EADS Loss Exceeds $1 bn

10.03.2010 Europe

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EADS canceled its annual dividend for the first time as the European aerospace and defense company posted a 2009 net loss of 763 million euros ($1.04 billion), partly because of fresh provisions on the A400M military airlifter program.
Shares in EADS were down 4.41 percent at 15.18 euros in yesterday's trading, bouncing off a day's low of 14.93 euros.
"EADS guidance for 2010 was lower than the market consensus," an analyst said. EADS forecast earnings before interest and tax, stripped of non-recurring items and provisions, of about 1 billion euros for the current year, half the 2.2 billion reported for 2009.
Underlying earnings plunged to a loss of 322 million euros from a positive result of 2.8 billion euros in the previous year, hammered by provisions of 1.8 billion euros on the A400M program, continued industrial difficulties on the A380 superjumbo and foreign exchange positions.
The fresh provision of 1.8 billion euros on the A400M program comes on top of 2.4 billion euros previously booked. Some 700 million euros of provisions have already been consumed, an EADS executive said.
Chief Executive Louis Gallois said it was the first time EADS failed to pay an annual dividend but the board took the decision in light of the loss for the year. The company plans to pay a dividend for 2010, he said.


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