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B/E Aerospace flies short-term storm flags

13th October 2008 - 01:00 GMT | by The Shephard News Team

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SEATING and cabin systems juggernaut B/E Aerospace forecasts a strong result for the third quarter of its financial year but warns that the outlook for the near term is much less bright.??

Due out on October 27, the Florida-based company?s latest accounts are expected to show revenues and operating earnings up more than 35 per cent and 65 per cent respectively compared with the same period last year. ?But the near-term outlook has deteriorated significantly,? cautions chief executive Amin Khoury.

?The weakened global economy, the impact of the high cost of energy on consumers, high jet fuel costs, and high ticket prices are negatively impacting global passenger air travel,? he says. ?Airlines are significantly reducing capacity and implementing tough cash-conservation measures. The business jet industry has also begun to be negatively impacted. These conditions are affecting demand for our products, and we are lowering our financial guidance for the remainder of this year and for 2009 and 2010.?

Even so, the company is aiming for revenues of $2.5 billion in 2009, up 25 per cent on this year, and expects both revenues and earnings to grow further in 2010.

And there?s more good news for B/E shareholders in the form of an announcement that Airbus has selected the company to supply galleys for the A350 XWB. Valued at more than $1 billion, the contract is described as B/E?s largest-ever award. Deliveries are due to begin in 2013.

The company also holds contracts to supply oxygen systems for the A350, oxygen systems, passenger services unit (PSU) and other products for the Boeing 787, and a variety of equipment for the Boeing 747-8 and Airbus A380. B/E will also equip a number of the new business jets to be introduced in the next few years. ?Our exceptionally strong position on these new aircraft, along with other current awards, leads us to expect increasing revenue growth from our commercial aircraft and business jet segments from 2010,? says Khoury.

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