France's Safran Lift Year's Outlook as Profit Rises

By Robert Wall 

        French aerospace supplier Safran SA lifted its earnings outlook for the year as it reported an 89% jump in profit, aided by disposals.
        Net profit for the first six months was EUR1.2 billion ($1.28 billion), compared with EUR616 million in the year-prior period, the Paris-based company said Thursday. The profit increase reflects a EUR419 million euro gain from Safran's disposal in May of its stake in Ingenico, a company involved in payment services.
        Safran sales in the first six months rose 16.6% to EUR8.4 billion, as the maker of aircraft and rocket engines was helped by a strengthening of the dollar against the euro. The currency change accounted for EUR782 million of the sales increase.
        Safran raised its outlook for full adjusted recurring operating income on the strength of its civil aerospace aftermarket activities. Operating income will rise by a midteen percentage, rather than by low double digits as initially forecast, it said.
        "The continued healthy growth in demand for air travel and improving economics for many of our airline customers underpin our confidence in the civil aftermarket and allow us to raise our profitability guidance for this year," Chief Executive Philippe Petitcolin said.
        Safran is bucking a trend in the aerospace industry that has seen several companies recently report weak aftermarket business.
        The French company also said revenue could advance in the low double digits, assuming an exchange rate for the rest of the year of about $1.12 per euro. The current forecast remains for high single-digit percentage growth, based on an exchange rate of $1.20 per euro.
        Safran also said it had signed a contract with Egypt for the sale of advanced air-to-ground missiles. The sale is part of Egypt's purchase of 24 French Rafale strike fighters made by Dassault, for which Safran also provides engines.
        Write to Robert Wall at robert.wall@wsj.com
        (END) Dow Jones Newswires

        July 30, 2015 01:00 ET (05:00 GMT)

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