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Airbus parent EADS said Wednesday it returned to profit in the first quarter as the planemaker increased deliveries and the company cut costs, helping offset the weaker dollar.European Aeronautic Defence & Space Co. NV reported a net profit in the January to March quarter of 285 million euros ($440 million), compared with a loss of 10 million euros a year earlier. In the previous five quarters, EADS has been in the red four times.
Shares rose 5.6 percent to 16.6 euros ($25.69).
"There is a lot to be encouraged by here," said ABN Amro analyst Sandy Morris.
"The credibility of the management team is building steadily."
CEO Louis Gallois said in a statement the results are "encouraging."
"Though many serious challenges have been overcome there remains much to do," he added.
EADS didn't change its expectations for earnings this year, but warned of a possible "negative impact" from the weakening dollar later in the year.
The dollar's slide against the euro makes it harder for Airbus to compete against Boeing Co. Unlike its U.S. rival, many of Airbus' costs are in euros, though it sells its planes in dollars.
A sizeable restructuring is underway at EADS in which 10,000 job cuts are planned by 2010.
Gallois, speaking on RTL radio, said additional measures to compensate for the weak dollar are needed. He mentioned cuts to research budgets and shifting acquisitions to the dollar.
The 15-nation currency has hit record highs in recent weeks against the dollar and purchased $1.5422 in morning European trading Wednesday.
"The supply chain really has to move" into the dollar-zone, said Morris.
"It will be expensive and painful to do this but its arguably the only way you can secure the company's long-term future."
He said the "unmitigated good news" of EADS' results in the improvement of its net cash position to 8.3 billion euros ($12.84 billion) in the quarter, from 7 billion euros a year earlier, which means EADS can afford further restructuring.
A cost-cutting plan was devised after multiple delays to the A380 superjumbo and a redesign of the A350 — the planned competitor to Boeing's 787 — wiped billions of euros off EADS' profits.
In the first quarter sales increased 10 percent to 9.9 billion euros ($15.3 billion) from 8.9 billion euros a year earlier.
Earnings before interest, taxes, goodwill impairment and exceptional items — a measure of profit favored by analysts — increased almost ninefold to 769 million euros ($1.23 billion) from 88 million euros. That exceeded analysts' expectations of 359 million euros ($555 million), according to a poll by Dow Jones.
EADS predicts 2008 revenues will exceed 40 billion euros ($61.9 billion), with an EBIT of 1.8 billion euros ($2.8 billion).
The forecast is based on Airbus delivering about 470 airplanes in the year and taking over 700 orders. It does not take into account the additional delays to the A380 superjumbo announced Tuesday, which may result in financial penalties from airlines.
Airbus, which accounts for two-thirds of EADS' sales, reported earnings before interest and taxes of 698 million euros ($1.08 billion) in the quarter after a loss of 69 million euros a year earlier.
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