France’s Safran reported a stronger-than-anticipated climb last year core profit headed by jet engine spare components; however, warned of flat-to-lower 2020 revenue hit by Boeing’s 737 MAX grounding crisis.
Safran co-produces the jet’s engines with General Electric and makes the majority of its cabling in addition to equipment from oxygen masks to fuel systems, lighting and cockpit doors after buying Zodiac Aerospace in 2018.
The plane’s virtually 12-month grounding following two fatal accidents dominated a mixed scope for 2020, with Safran predicting revenue flat or down by up to 5% even as operating earnings is set to grow by nearly 5%
To assist in reaching that estimate, it stated was targeting 300 million euros ($326 million) of cost savings and different belt-tightening measures to cope with the 737 MAX outage.
Safran’s 737 MAX plan involves cost savings, a hiring freeze, and lower R&D and capital spending for this year
It has further negotiated a new settlement with Boeing for new payments terms this year on the 737 MAX, without revealing details.
The world’s third-largest aerospace supplier stated its 2019 operating revenue soared 24.6% on a like-for-like basis to 3.82 billion euros ($4.2 billion) on revenue up an underlying 9.3% to 24.64 billion.
Analysts had anticipated operating revenue of 3.75 billion euros on revenue of 24.48 billion, based on Refinitiv data.
The French firm posted growth throughout the board, notably at its recently bought and shook-up interiors units.