EADS reports Q1 loss but record cash pile

EADS reports Q1 loss but record cash pile
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EADS posted a 12 million euro loss in the first quarter, but blamed factors like an accounting change and unfavourable currency exchange rates from the strong euro. It said it is still set to hit its annual sales and delivery targets.

The parent company of Airbus also revealed it has record cash reserves of 12.2 billion euros just weeks after getting a 3.5 billion euro bailout of its A400M military transporter, which ran wildly over budget.

Much of that cash pile comes from deposits from airlines ready to invest in new aircraft to expand their fleets.

The size of its reserves drew criticism; in Germany, opposition Greens accused EADS of strong-arming European governments into agreeing to provide the extra funding by suggesting the Franco-German-led company could collapse.

“It doesn’t match up. On one side EADS insists on a bailout, arguing that the company would face the end otherwise. But their balance sheet speaks a completely different language,” said Omid Nouripour, a member of the German parliament and defence expert for the opposition Greens.

He said the former defence minister Karl-Theodor zu Guttenberg “seems to have let himself be blackmailed with false figures”.

EADS chief Executive Louis Gallois defended the bailout, under which some of the money will be paid back from sales of the planes outside Europe.

“I don’t think it (the cash surplus) is changing anything. The bailout money is to reduce the level of losses we have,” Gallois said.

Analysts said EADS must answer to private investors calling for it to put its war-chest to good use and simultaneously maintain support from taxpayers to research and build aircraft.

As well as the bailout deal with seven European nations for the A440M, the company is expected to receive European loans for the development of its A350 airliner.

Rival Boeing has made much of the size of the EADS cash trove as their respective governments battle over aircraft subsidies at the World Trade Organisation, arguing Airbus does not need loan support from European nations.

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