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B/E Aerospace reports increasing headwinds

27th October 2008 - 00:00 GMT | by The Shephard News Team

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B/E Aerospace today delivered on its promise of top-flight third-quarter results (Inflight Online, October 13). But the Florida-based cabin equipment giant also warned of “increasing headwinds”.
 
The company reported net sales of $588 million for the quarter, up 37 per cent compared with the same time last year, while operating earnings grew 60 per cent to $101 million. Net earnings of $57 million were up 27 per cent. “Despite increasing headwinds during the quarter, we achieved strong revenue growth and significant margin expansion in both our commercial aircraft and business jet segments,” said B/E chief executive Amin Khoury.

The headwinds were evident in the revenues from B/E’s commercial aircraft segment. At $301 million they grew a comparatively modest 5 per cent, braked by lower levels of spares revenues as a result of the slowdown in air travel and the airlines’ introduction of cash-saving measures. Business jet revenues advanced 42 per cent to $68 million, however, in a reflection of strong shipments of corporate aircraft interior equipment and airline super-first-class products. Bookings in the quarter totalled about $600 million, while backlog stood at $2.9 billion at the end of the period.

For the nine months to the end of September B/E logged net sales of $1,583 million, up 30 per cent and well on the way to a declared target of $2 billion for the year. Net earnings soared 47 per cent to $154 million.

Khoury warned of tougher times ahead, while insisting that the company was well placed to ride them out. “Over the past several months global and domestic economic trends have become increasingly negative,” he said. “These factors include a sudden and significant slowdown in domestic and international passenger air travel, tough cash conservation measures by the airlines, and the Boeing strike. But we believe we have positioned ourselves well for this downturn, with a robust balance sheet, over $115 million of cash on hand, a global blue-chip customer base and strong market leadership.”

Despite the turbulence, B/E sees its revenues growing by another quarter to reach $2.5 billion next year, and climbing higher still in 2010.

The Shephard News Team

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