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redflyer
Topic Author
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EADS: "Things To Get Worse Before They Get Better"

Sun Sep 03, 2006 11:08 am

Ran across this article on BAE's decision to go ahead with the sale of its stake in EADS. Couldn't help but notice this comment:

But with serious question marks over the development and cost of the A380, BAE is thought to have concluded that a quick sale is in the best interests of its shareholders because, according to one analyst, 'things will probably get a lot worse at EADS before they get better'.

I was under the impression that they (EADS) had turned the corner with new management and a decision towards a solid product offering.

http://observer.guardian.co.uk/business/story/0,,1863505,00.html
A government big enough to take away a constitutionally guaranteed right is a government big enough to take away any guaranteed right. A government big enough to give you everything you need is a government big enough to take away everything you have.
 
corey07850
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RE: EADS: "Things To Get Worse Before They Get Better"

Sun Sep 03, 2006 11:35 am

The quote was according to an analyst, not according to EADS
 
dallasnewark
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RE: EADS: "Things To Get Worse Before They Get Better"

Sun Sep 03, 2006 11:38 am

Quoting Corey07850 (Reply 1):
The quote was according to an analyst, not according to EADS

And when was the last time you have ever seen a corporation making a statement that things would get a lot worse prior to getting better?
The answer is never.

Wall Street would devastate a corporation making such a statement
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redflyer
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RE: EADS: "Things To Get Worse Before They Get Better"

Sun Sep 03, 2006 12:03 pm

Quoting Corey07850 (Reply 1):
The quote was according to an analyst, not according to EADS

Sorry if it came across that way. I was trying to render the comment as someone else's quote from the article (rather than my own opinion), and did not intend to attribute it to EADS.

Now, if I could only change the title...
A government big enough to take away a constitutionally guaranteed right is a government big enough to take away any guaranteed right. A government big enough to give you everything you need is a government big enough to take away everything you have.
 
airfrnt
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RE: EADS: "Things To Get Worse Before They Get Better"

Sun Sep 03, 2006 2:37 pm

It just confirms that BAE wants no part in the cost, or the percieved benefits from the 350++.
 
Lumberton
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RE: EADS: "Things To Get Worse Before They Get Bet

Mon Sep 04, 2006 12:10 am

Sad sign of the times. All it takes is for some journalist somewhere to write an article based on rumor or hearsay (or as we see here an "analyst" presumably opining), an editor to clear it, and a publisher who accedes to this kind of journalism. Also, with the proliferation of blogs, some quite good, others spurious, rumors are easy to start.

IMO, BAE wants out not because they see an EADS train wreck coming, but because it fits with their business strategy.
"When all is said and done, more will be said than done".
 
redflyer
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RE: EADS: "Things To Get Worse Before They Get Better"

Mon Sep 04, 2006 12:26 am

Quoting Lumberton (Reply 5):
IMO, BAE wants out not because they see an EADS train wreck coming, but because it fits with their business strategy.

I see your point, but I'm not sure losing over £1 billion (US$1.9 billion) is part of their business strategy either.
A government big enough to take away a constitutionally guaranteed right is a government big enough to take away any guaranteed right. A government big enough to give you everything you need is a government big enough to take away everything you have.
 
Lumberton
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RE: EADS: "Things To Get Worse Before They Get Bet

Mon Sep 04, 2006 12:29 am

Quoting RedFlyer (Reply 6):
I see your point, but I'm not sure losing over £1 billion (US$1.9 billion) is part of their business strategy either.

BAE did not "lose" £1 billion in an operating (i.e., P&L sense); maybe in an accounting context, same as "goodwill". If it was an expectation tht was factored into their share price, it's long since been market adjusted by now.

[Edited 2006-09-03 17:30:45]
"When all is said and done, more will be said than done".
 
supa7E7
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RE: EADS: "Things To Get Worse Before They Get Better"

Mon Sep 04, 2006 12:46 am

Airbus's successful products of the future:

A380-900 (released 2008)
A350-900
A320-Revised (using ideas from Boeing Y1, perhaps improving them)

These products are quite invisible to us now in 2006. But they will be great, in time.
"Who's to say spaceships aren't fine art?" - Phil Lesh
 
ebbuk
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RE: EADS: "Things To Get Worse Before They Get Better"

Mon Sep 04, 2006 5:49 am

Oh sacre bleu! One analyst has whispered in BAE's ear that he (or she) thinks that things will get worse before they get better at EADS.

PANIC PANIC PANIC! DOOM and GLOOM- on anet

The reality is that in the timeframe that BAE has given itself to achieve its objectives, their stake in Airbus will not help it reach that goal

Everyone else who sees the bigger picture- EASY STREET, TELL US SOMETHING NEW
 
sllevin
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RE: EADS: "Things To Get Worse Before They Get Better"

Mon Sep 04, 2006 5:58 am

Just going through with the sale makes it obvious that BAE has come to the conclusion that their stake will not return to it's previous value for quite some time. As far as "getting worse" -- that's a different story.

But if BAE doesn't feel the stake will return to its previous value within 7-10 years, then it makes sense to sell now and take the hit.

Steve
 
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mariner
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RE: EADS: "Things To Get Worse Before They Get Better"

Mon Sep 04, 2006 6:00 am

Quoting RedFlyer (Reply 6):
I see your point, but I'm not sure losing over £1 billion (US$1.9 billion) is part of their business strategy either.

All we can learn from that is that BAE has (i) lousy timing or (ii) very optimistic accountants.

Quoting RedFlyer (Reply 3):
I was trying to render the comment as someone else's quote from the article

But who? The "analyst" is un-named.

And it is a perfectly safe bet - things may get worse before they get better.

The new CEO, Mr. Strief, has said so. I'd trust him over some un-named "analyst".

cheers

mariner
aeternum nauta
 
thebry
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RE: EADS: "Things To Get Worse Before They Get Better"

Mon Sep 04, 2006 6:06 am

Quoting Supa7E7 (Reply 8):
Airbus's successful products of the future:

A380-900 (released 2008)
A350-900
A320-Revised (using ideas from Boeing Y1, perhaps improving them)

These products are quite invisible to us now in 2006. But they will be great, in time.

"Successful products of the future"?? Does that sound strange to anyone else?
 
ebbuk
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RE: EADS: "Things To Get Worse Before They Get Better"

Mon Sep 04, 2006 6:10 am

Quoting Thebry (Reply 12):
"Successful products of the future"?? Does that sound strange to anyone else?

yeah all composite planes
 
redflyer
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RE: EADS: "Things To Get Worse Before They Get Better"

Mon Sep 04, 2006 11:38 am

Quoting Mariner (Reply 11):
And it is a perfectly safe bet - things may get worse before they get better.

A "safe bet"? Interesting. Inasmuch as I think Airbus has lost its way, I would have bet that they are on the right track to recovery. While I certianly would not have backed up my bet with an investment in the company, I would never have ventured to say that it's a safe bet that things may get worse before they get better.

And that is why I started this thread...reading the article on BAE's sale came as a surprise when I read that an analyst predicted things would get worse over at EADS before they get better.

What I want to know is what exactly at EADS/Airbus is going to pop next? Is there any truth to the latest rumors that the A400M is going to fall behind schedule? More A380 delays?
A government big enough to take away a constitutionally guaranteed right is a government big enough to take away any guaranteed right. A government big enough to give you everything you need is a government big enough to take away everything you have.
 
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mariner
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RE: EADS: "Things To Get Worse Before They Get Better"

Mon Sep 04, 2006 12:31 pm

Quoting RedFlyer (Reply 14):
I would have bet that they are on the right track to recovery.

You are looking at it from the perspective of aircraft manufacture.

This un-named (maybe non-existant?) analyst is talking about valuation - the share price and the BAE shareholding.

The two do not necessarily go hand in glove.

Quoting RedFlyer (Reply 14):
I would never have ventured to say that it's a safe bet that things may get worse before they get better.

It is fairly common when companies go through a crisis. I guess the obvious one is Daimler Chrysler, after the merger.

Airbus went through a crisis, and has taken certain actions to recover. This does not mean that all the financial issues and ramifications of the crisis have gone away, or are even known.

Mr. Streif has set up the financial community to expect more A380 delays. He will get a honeymoon.

But if the effect on profits are greater than what is already expected, then the honeymon won't last.

Quoting RedFlyer (Reply 14):
What I want to know is what exactly at EADS/Airbus is going to pop next?

And you believe anyone here can tell you? Gosh.

cheers

mariner
aeternum nauta
 
baron95
Posts: 1106
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RE: EADS: "Things To Get Worse Before They Get Better"

Mon Sep 04, 2006 12:36 pm

All this talk of doom and gloom first for Boeing then for Airbus. Have people lost total ability to put things in perspective?

Boeing and Airbus are the dominant (near duo-polist) players in one of the top 6 most important industries in the planet (next to oil, auto, construction, electronics, telecom). Their industry has less competition (by number of significant players) then all the other top sectors.

Unless they screw-up royaly, both Airbus and Boeing stand to make (scratch that "mint") money for years and years. It would take an earthquake to unseat them or for customers to allow either of them to become marginalized.

So relax. Ups and downs in business is nothing new. These are top rate engineering and production powerhouses - the top dogs in one of the top industry. They have killed off or swallowed all the other major competitors (save Embraer and Bombardier at the low end). The future is bright indeed.
Killer Fleet: E190, 737-900ER, 777-300ER
 
billreid
Posts: 761
Joined: Fri Jun 23, 2006 10:04 am

RE: EADS: "Things To Get Worse Before They Get Better"

Mon Sep 04, 2006 1:38 pm

Quoting Supa7E7 (Reply 8):
Airbus's successful products of the future:

A380-900 (released 2008)
A350-900
A320-Revised (using ideas from Boeing Y1, perhaps improving them)

These products are quite invisible to us now in 2006. But they will be great, in time.

You obviously know far more than BAE. What's your investment in EADS, 100 Mil, perhaps 500 Mil, or even better still some stupid comments and Nil Euros.
Some people don't get it. Business is about making MONEY!

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