Manufacturer's performance in market has knock-on effect for shareholder's results

Airbus's ability to avoid the worst effects of the continuing aviation downturn means that shareholder BAE Systems has also had a good first half, say analysts.

Airbus reported earlier this year that it had pulled ahead of rival Boeing, delivering 149 commercial aircraft in the first half of 2003 against Boeing's 145 (Flight International, 15-21 July).

Although this was down on the same period in 2002, it meant Airbus had survived the slump relatively unscathed: Boeing, by contrast, saw output drop by one-third. In its results for the six months to 30 June, due this week, BAE Systems, which owns 20% of Airbus, is expected to reflect this comparative success.

Aerospace analyst Sandy Morris of ABN Amro says his opinion of BAE's prospects has improved since its full-year results in March. "We were braced for a setback at Airbus, but it just isn't happening." Profits before tax for the period should now be around £90 million ($142 million), up from last year's £41 million, on sales roughly the same as last year - about £5.7 billion.

In profit terms, "the mainstays remain Customer Solutions &Support and North America", which with Airbus, produce almost all of BAE's earnings, says Morris.

Finmeccanica, also due to announce interim results this week, will again be led by its 18% stake in chip manufacturer STMicro, which produced 65% of net profits and 75% of total revenues in the first half of last year. Driven by recovering demand for mobile telephones and computers, STM is expected to perform well again this year.

The two companies started due diligence this month on the proposed creation of a series of joint venture companies from their avionics and electronics businesses.

Source: Flight International