11 Dec 14. Airbus (AIR.PA) sought to reassure investors on Thursday by promising profit growth beyond 2017 and healthy dividends after its shares continued a slide begun on Wednesday when it warned of flat 2016 earnings. Investors also worried about a cut in production rates for the A330 as Airbus moves to a newer version of the wide-bodied plane, dubbed the A330neo, and as it ramps up production of its new A350. “Yes, there is a risk the rate will come down, but this is not the point,” Chief Financial Officer Harald Wilhelm said during the second day of an investor event in London. “The point is that this is the way forward for the neo that will then ramp up and that will provide a clear bridge into profitability.” Shares in Airbus fell 4 percent on Thursday, adding to a 10.4 percent drop in the previous session, their worst performance in more than six years. The Wednesday plunge represented a wipeout in the company’s market value of 3.9bn euros ($4.9bn), roughly the price of a dozen Airbus A380 jumbo jets. Airbus sales chief John Leahy sought to ease fears of slightly lower margins on the A320 single-aisle plane by saying Airbus was currently commanding a premium price for the A320neo and that the price for the older version was holding steady. Wilhelm added divestments would boost dividends as the group embarks on a program to streamline its defense and space portfolio. The investor day was also overshadowed by the future of the A380 program. The head of Airbus’ planemaking unit said on Thursday the group would “one day” re-engine or stretch the A380. A suggestion that Airbus could stop making the plane after 2018 drew an angry reaction from the jet’s biggest customer, Emirates, which said it could double its investment if the planemaker agreed to upgrade the A380 instead. Some analysts and traders were of the view that the sell-off in Airbus’ stock was overdone, but they also noted additional concerns that falling oil prices would reduce airlines’ incentive to buy new, more fuel efficient aircraft. “Over the course of the last year, estimates perhaps didn’t come down enough to incorporate A330 pressures and arguably needed to be reset in our view,” Barclays analysts wrote in a note. UBS raised its earnings forecast by 2 percent for 2015, but cut it by 5 percent for 2016, 15 percent for 2017, and 10 percent for 2018. (Source: Reuters)
11 Dec 14. Global engineering, construction and services company KBR, Inc. (NYSE: KBR) announced the results of a major Strategic Review which will see the company become a more streamlined, empowered and accountable global organization with three strategic focus areas:
* Growth through differentiated consulting services and technology targeting oil and gas and chemicals to enhance the technical and financial returns to our customers
* Enhanced returns through globalized project delivery and differentiated engineering, procurement, construction, commissioning and maintenance services
* Global government services focused on long-term contracts
KBR President and Chief Executive Officer Stuart Bradie, who implemented the review upon his arrival in June 2014, said the new organization is designed to simplify the structure, reduce overhead costs and create a more market-focused business.
“The restructure we are announcing today will create a new KBR focused on its core strengths structured along delivery lines that will enable us to meet the expectations of our customers and other stakeholders. This, combined with reduced complexity, will provide a more robust balance sheet and greater accountability and empowerment for our people. KBR will be well placed to meet the challenges of the future,” Bradie said. Effective December 31, 2014, KBR, Inc. will be reorganized into three new businesses that will focus on core strengths in consulting, technology, engineering and construction and government services:
* Technology & Consulting combines all proprietary KBR technologies, knowledge-bas