Jet engine maker Safran raises targets after record first-half margin
GE•Safran raises full-year targets after stronger first half
PARIS, July 28 (Reuters) - French jet engine maker Safran joined its partner GE Aerospace in raising financial targets after posting stronger-than-expected first-half profits on Tuesday.
The French company, which is one of the world's largest aerospace equipment suppliers as well as co-owning the CFM engine joint venture with GE, said strong demand for spare parts contributed to a record first-half operating margin of 18.4%.
Higher profit and revenue, led by propulsion and spare parts
CFM, the world's largest jet engine maker by the number of units sold, is reaping maintenance profits from its CFM56 jet engines, which continue to power thousands of planes despite being succeeded by the more recent LEAP for current narrow-body deliveries.
Safran said its mid-year recurring operating profit jumped 29% to €3.24 billion ($3.68 billion), while revenue rose 19% to €17.57 billion. Widely watched sales of spare parts for civil engines rose 27.9% in dollar terms.
Analysts were on average expecting recurring operating profit of €3.06 billion on revenue of €17.47 billion.
Safran's core Propulsion division, which brings in just over half the company's sales, posted a 28% earnings rise to €2.25 billion, while Equipment & Defense rose 29% to €907 million.
Aircraft Interiors continued a gradual turnaround with a profit of €54 million, up from €27 million.
Raised guidance for revenue, operating profit and LEAP deliveries
Safran raised its percentage target for full-year revenue growth to the "mid-teens" from a previous "low-to-mid-teens".
Safran also predicted full-year operating profit of €6.4 billion to €6.5 billion, up from a previous goal of €6.1 billion to €6.2 billion, and raised its forecast for growth in LEAP engine deliveries to "high teens" from a previous target of 15%.
