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Eads CEO: Focus On Cash Protection, Credit Rating  
User currently onlineRevelation From United States of America, joined Feb 2005, 12329 posts, RR: 25
Posted (4 years 4 months 2 weeks 1 day 1 hour ago) and read 2366 times:

In http://www.bloomberg.com/apps/news?pid=20601100&sid=aU_L56hjQegM we read:

Quote:

The company had cash of 9.8 billion euros, and Gallois said today that cash protection will remain a main focus going forward, in order to help EADS protect its credit rating.

Will this posture limit future moves such as starting an A320 replacement in the near/mid term?

Or even the much-rumoured A320 re-engine program?

Will it mean they are willing to stretch development of the A350 out to conserve cash?

The article points also out:
* EADS will be scrapping its dividend for the first time in its 10 year history
* 2009 loss was EUR 763M whereas analysts had predicted EUR 375M
* The stock fell 2.5% after the loss was announced and it gave lower guidance for this year
* EADS is predicting EUR 1B EBIT for 2010 which is about 0.5B lower than analysts predictions
* EADS giving no guidance for 2011
* EADS booked EUR 240M for A380 as well as 1.2B EUR for A400M
* "Over the years, Lagardere has whittled its holdings down to 7.5 percent, and Daimler has sold a 7.5 percent EADS stake to a group of German banks and states, while keeping voting control of those shares"
* "Daimler said in its annual report that resolution of the A400M dispute and additional charges may result in "a material negative effect" on earnings in the first quarter"

So will the investors also be less supportive of any new inititatives from Airbus/EADS?


Inspiration, move me brightly!
9 replies: All unread, jump to last
 
User currently onlineStitch From United States of America, joined Jul 2005, 30528 posts, RR: 84
Reply 1, posted (4 years 4 months 2 weeks 1 day 1 hour ago) and read 2346 times:
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Well the A350XWB-900 and A350XWB-800 should be safe, but considering the...weak...sales of the A350XWB-1000, Airbus might decide to extend the development time of that model since it will involve multiple system changes compared to the smaller models.

As for the A320 re-engine program, I would expect the bulk of costs will be supported by the engine manufacturers. Also, I believe Airbus is now planning a production rate increase for the A320, so customer demand seems to be picking up for the model.


User currently offlineastuteman From United Kingdom, joined Jan 2005, 9975 posts, RR: 96
Reply 2, posted (4 years 4 months 2 weeks 1 day 1 hour ago) and read 2310 times:
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Quoting Revelation (Thread starter):
Will this posture limit future moves such as starting an A320 replacement in the near/mid term?

Or even the much-rumoured A320 re-engine program?

Will it mean they are willing to stretch development of the A350 out to conserve cash?

I don't see why it needs to.

The A320 replacement has been slated by both Boeing and Airbus to be a "next decade" item, by which time the A380 and A400M woes will be a distant memory.

I suspect the A320 re-engine programme isn't that big a ticket item anyway.

It's difficult to see how slowing down the A350XWB's EIS will help conserve cash - I can see it having the opposite effect, without the associated revenue stream.
With the A350-800 now being a straight shrink of the A350-900, I don't see much mileage for savings there, either.

I could see the A350-1000 EIS being stretched a bit - it's currently a smaller and later part of the backlog, and I suspect it will require a fair bit of supplementary engineering beyond the A350-900

It will probably slow down any plans to launch derivative A380's, but as delivering the current A380 backlog is part of the problem, I guess that's not top of the "to-do" list just now.

Just like the good old days this.
5 threads in 24 hours either implying, or declaring straight out that Airbus is hamstrung and ripe for picking.....
Almost makes me feel 5 years younger.....
Almost

Rgds


User currently onlinePPVRA From Brazil, joined Nov 2004, 8941 posts, RR: 40
Reply 3, posted (4 years 4 months 2 weeks 1 day 1 hour ago) and read 2271 times:

They need to get those A380s out the door. Hopefully production pace will pick up this year.


"If goods do not cross borders, soldiers will" - Frederic Bastiat
User currently offlineDLPMMM From United States of America, joined Apr 2005, 3589 posts, RR: 10
Reply 4, posted (4 years 4 months 2 weeks 1 day ago) and read 2210 times:

Quoting Stitch (Reply 1):
I believe Airbus is now planning a production rate increase for the A320, so customer demand seems to be picking up for the model.

I think that the production rate increase is more in an effort to boost cash flow and profits over the next few years, rather than in response to any increase in narrow body demand. There is no doubt enough demand out there to support the new production rate, so it is not harmful.

I don't think the released results will have any great effects on the current Airbus/EADS plans, but might lend a little extra caution into the review of any new program proposals.


User currently onlineStitch From United States of America, joined Jul 2005, 30528 posts, RR: 84
Reply 5, posted (4 years 4 months 2 weeks 1 day ago) and read 2193 times:
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Quoting DLPMMM (Reply 5):
I think that the production rate increase is more in an effort to boost cash flow and profits over the next few years, rather than in response to any increase in narrow body demand. There is no doubt enough demand out there to support the new production rate, so it is not harmful.

  

Either Airbus has customers for these new planes or they don't. And they do not make money from building white-tails.

So there must be demand for those additional planes every month and that demand must not be short-term (as in you have a handful of customers in a growth position ready for new planes in the near term while the majority are deferring slots in the near-to-mid terms).

Now considering that a number of analysts have stated over the past 12 months that they believed both Airbus and Boeing were "not accepting reality" by maintaining their narrowbody production rates during the recent downturn, that both companies are now planning to increase production (and in the case of Boeing, also considering canceling the planned decrease in the 777's production rate) can only lead me to believe that customer demand for deliveries is strengthening, even if orders remain weak.


User currently offlineJacobin777 From United States of America, joined Sep 2004, 14968 posts, RR: 60
Reply 6, posted (4 years 4 months 2 weeks 1 day ago) and read 2187 times:

Quoting Stitch (Reply 1):
but considering the...weak...sales of the A350XWB-1000,

It does have 75 orders and 3 commitments already so its not doing that bad....



"Up the Irons!"
User currently offlineDLPMMM From United States of America, joined Apr 2005, 3589 posts, RR: 10
Reply 7, posted (4 years 4 months 2 weeks 1 day ago) and read 2157 times:

Quoting Stitch (Reply 5):
Either Airbus has customers for these new planes or they don't. And they do not make money from building white-tails.

So there must be demand for those additional planes every month and that demand must not be short-term (as in you have a handful of customers in a growth position ready for new planes in the near term while the majority are deferring slots in the near-to-mid terms).

Now considering that a number of analysts have stated over the past 12 months that they believed both Airbus and Boeing were "not accepting reality" by maintaining their narrowbody production rates during the recent downturn, that both companies are now planning to increase production (and in the case of Boeing, also considering canceling the planned decrease in the 777's production rate) can only lead me to believe that customer demand for deliveries is strengthening, even if orders remain weak.


I haven't seen a plethera of narrow body white tails at either manufacturer so far.

Both Airbus and Boeing have a huge backlog in narrow body orders. I don't know who the analysts are that you are referring to (and I do not doubt you that many analysts have been saying as much), but it sounds to me like they were very myopic in that short term deferrals during an economic recession is not indicative of a global sea change in demand.

Some juggling of the orders to meet changing customer schedules would not be a surprise, but there are enough customers where someone is always seemingly in need of expedited deliveries.

Given the current order book for both manufacturers, I don't think that either of them will have much problem in placing their narrow bodied planes at the current and projected production rates for the next several years, provided the airline industry does not undergo a major long term depression.

In the long term both manufacturers could be adding too much manufacturing capacity, but this needs to be balanced against the benefit of greater short to medium term cash flow.

[Edited 2010-03-10 10:19:22]

[Edited 2010-03-10 10:21:03]

User currently onlineRevelation From United States of America, joined Feb 2005, 12329 posts, RR: 25
Reply 8, posted (4 years 4 months 2 weeks 21 hours ago) and read 2065 times:

Quoting astuteman (Reply 2):
5 threads in 24 hours either implying, or declaring straight out that Airbus is hamstrung and ripe for picking.....

I know asking a question isn't a declaration.

Does asking a question mean one is making an implication?

My dictionary defines "to imply" as "to indicate or suggest without being explicitly stated".

So I don't think a question is an implication.

Do you?

I do wonder if these recent financial reports do leave Airbus a bit hamstrung.

But I'm not intending to imply that they are, I'm just asking others hopefully more knowledgeable than me in financial matters what they think.

I don't know who would suggest Airbus can be picked, since various EU governments hold golden shares that would certainly prevent anyone from acquiring them.



Inspiration, move me brightly!
User currently offlineastuteman From United Kingdom, joined Jan 2005, 9975 posts, RR: 96
Reply 9, posted (4 years 4 months 2 weeks 10 hours ago) and read 1890 times:
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Quoting Revelation (Reply 8):
So I don't think a question is an implication.

Do you?

As I answered your questions in good faith, I think you have your answer.

Rgds


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