Industry & Trade
Airbus Q1 profit falls on weak pricing, higher costs
Published 2017-04-27 12:40:39| Amwal Al Ghad English
Europe's Airbus reported on Thursday a steeper than expected 52 percent drop in first-quarter profit, weighed by weaker prices as it changes to new models and higher production costs, but reaffirmed targets for higher profits for the year. The world's second-largest planemaker after Boeing said adjusted operating profit fell to 240 million euros ($261.7 million), while revenues rose 7 percent to 12.988 billion euros. Analysts were on average expecting adjusted operating income of 344 million euros, down 31 percent, and 5.5 percent higher revenues of 12.857 billion, according to a Reuters poll. Airbus said it was still worried about problems with temperamental engines for its new A320neo passenger plane from Pratt & Whitney, and commercial exposure on the troubled A400M military aircraft program. It expects deliveries of the A320neo once again to fall predominantly in the latter part of the year, but has said it hopes to avoid the last-minute rush seen in December last year. The engine issues "need to be resolved," Airbus said in a statement. The Airbus planemaking business saw 31 percent lower profit despite a 13 percent rise in revenues. The Toulouse-based firm said this reflected a different mix of aircraft, with more of the new A350s delivered in the first quarter, "transition pricing" and higher production ramp-up costs. New aircraft tend to be sold at heavier discounts to spur further orders. The Airbus Helicopters unit slipped into loss as the world's largest commercial helicopter maker continues to suffer from the grounding of aircraft in UK and Norway, following a crash that killed North Sea oil workers. For 2017, Airbus expects to deliver over 720 aircraft and to report mid-single-digit percentage growth in operating income. Airbus' results came a day after Boeing reported a 19 percent rise in first-quarter profit, with its U.S rival also lifting its full-year forecast.
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Facebook and Alphabet-owned Google must accept that they are media, not technology companies, and deal with inappropriate content on their platforms, Martin Sorrell, chief executive of WPP told CNBC on Thursday, despite both U.S. firms trying to distance themselves from that label. The boss of the world's largest advertising firm was responding to questions about the "brand safety" issues seen on both Facebook and YouTube, such as ads being placed next to extremist content and problems with fake news. Speaking about his first quarter results released on Monday, Sorrell said that the company – which represents around $75 billion globally of media placements – saw clients continue to invest in advertising on Facebook, Google and newer entrants like Snap Inc's Snapchat. "So investment in digital continues … but you're right, there are these issues like brand safety, like measurability, we've had Facebook admitting on three or four occasions recently that the statistics that they give for their audiences were inaccurate," Sorrell told CNBC in a TV interview. "And of course, if any traditional medium, just like CNBC did that, they probably would be under extreme pressure if not out of business. So there are some very big issues, Google and Facebook are 75 percent of the digital marketplace … so they are very important and it is important that the data it shares in a more comprehensive way." Several brands pulled ads from Google-owned YouTube because they were being placed next to extremist content. Matt Brittin, Google's EMEA president of business operations, apologized in March for this issue. The company announced plans to expand its safeguards for advertisers including plans to take down inappropriate content faster. Facebook meanwhile has been criticized for allowing the proliferation of fake news on its platform. And it has also had trouble with its live broadcasting product – Facebook Live. Earlier this week, a Thai man broadcast himself hanging his baby daughter. Facebook has had a number of broadcasts that show violence. Sorrell said these internet giants need to accept their role as media companies, and that means having better control of the content that appears on their platforms. "The fundamental point is the acceptance by Google and Facebook that they are media companies and not technology companies and that they have the same responsibility as you do and for your content on CNBC on those media such as Google and Facebook or indeed Snapchat or Yahoo … so we are seeing some concerns in that area," Sorrell told CNBC. But being labeled a media company is something that Facebook and Google have tried to resist. "I don't think we have to be the publisher and we definitely don't want to be the arbiter of the truth," Facebook Chief Operating Officer Sheryl Sandberg said in a recent interview with the BBC. Nonetheless, WPP now gets 39 percent of its revenue from digital, with revenues from the segment up 4 percent on a like-for-like basis in the first quarter, a trend Sorrell said is likely to continue. Still, the WPP chief said that it could be a chance for traditional media to position themselves as a safer bet for advertisers. "This is an opportunity for traditional media to suggest that brand safety in traditional media is greater than it is in new media," Sorrell said. WPP reported like-for-like net sales in the first quarter were up 0.8 percent as it grappled with a decline in revenues from North America, its biggest market, as well as flat results in the emerging markets. "It was patchy and it was a tough first quarter," Sorrell said.
A delegation of most effective Lebanese businessmen in Africa is set to visit Egypt by the end of May, Egyptian trade and Industry Minister Tarek Qabil stated Saturday. The visit will be on the sidelines of the Egyptian-Lebanese Cooperation Forum, in which the mission will explore Egyptian industry through visiting a number of industrial zones in Egypt. Qabil has discussed the set-to-be visit during his meeting with Speaker of the Parliament of Lebanon Nabih Berri in the attendance of Egyptian International Cooperation Minister Sahar Nasr. During the meeting, Qabil and Berri discussed means of economic cooperation with Egypt and Lebanon.
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