EADS share price takes a tumble
Shares in European aerospace group EADS fell yesterday on reports of production problems with the Airbus A400M military transporter.
The European Aeronautic Defence and Space Company, which controls aircraft manufacturer Airbus, was down 3.86 percent at 19.95 euros on a Paris market that was 0.21 percent stronger.
German magazine Wirtschaftswoche said that the first flight of the A400M scheduled for July could be delayed because of problems with the aircraft's engines, fuselage and wing construction.
Analysts at Deutsche Bank expressed concern about "weakening fundamentals in the aeronautics business cycle in 2008" and lowered their recommendation on EADS shares to "sell" from "hold".
"The need for EADS to generate savings beyond those foreseen in Power8 to adapt to the persistent weakness of the dollar remains a key issue," they said.
The Power8 savings plan, which notably calls for the elimination of 10,000 jobs, was implemented at Airbus last year following the revelation of costly production and delivery setbacks in the A380 superjumbo program.
EADS managers say the company has been hurt by the steadily appreciating euro, which has lowered the value of its repatriated dollar earnings.
AFP
(China Daily 01/08/2008 page17)
