EADS returns to profit in first quarter

European Aeronautic Defence & Space Co. NV reported a net profit in the January to March quarter of euro285 million (US$440 million), compared with a loss of euro10 million a year earlier. In the previous five quarters, EADS has been in the red four times.

CEO Louis Gallois said in a statement the results are "encouraging."

"Though many serious challenges have been overcome there remains much to do," he added.

EADS didn't change its expectations for earnings this year, but warned of a possible "negative impact" from the weakening dollar later in the year.

The dollar's slide against the euro makes it harder for Airbus to compete against Boeing Co. Unlike its U.S. rival, many of Airbus' costs are in euros, though it sells its planes in dollars.

Gallois is seeking to reduce EADS' exposure to the dollar by shifting production to the dollar zone and increasing defense work.

EADS said it is progressing with a restructuring program, dubbed Power-8, which aims to shed 10,000 jobs by 2010 and transfer some factories to suppliers to share the financial risk of the mid-size A350 aircraft. Some of those talks recently broke down, but EADS said it expects to conclude sales of two factories in Germany and Britain in coming weeks.

The cost-cutting plan was devised after multiple delays to the A380 superjumbo and a redesign of the A350 -the planned competitor to Boeing's 787 -wiped billions of euros off EADS' profits.

In the first quarter sales increased 10 percent to euro9.9 billion (US$15.3 billion) from euro8.9 billion a year earlier.