PARIS, July 29 (UPI) -- France's defense and aerospace group Thales and military electronics maker Safran both reported a surge in first-half net earnings.
Thales' earnings grew more than 10-fold to $180 million, up from $16 million during the same period last year, the company said Wednesday.
"With growing pressure on public spending in Europe and North America, our first-half results are fully in line with what we expected at the beginning of the year," Thales Chief Executive Officer Luc Vigneron said in a statement. "Thales has begun to turn around its results and continues to be focused on improving performance and deploying a dynamic growth strategy in emerging countries' economies."
Thales, an electronics company with 68,000 employees, is one of the 10 largest defense contractors in the world. It makes electronic devices and weapons systems used in military and civil airplanes and ships. Thales has designed Britain's Future Carrier and will build a drone for the British air force.
The group said it foresees stable sales for this year and a return to net profit after the company lost some $260 million in 2009.
The Safran Group, a producer of aerospace and military electronics equipment employing 55,000 people Wednesday reported first-half net profits of $290 million, up 23 percent from the same period a year ago. The company raised its profit forecast for 2010, saying it was confident that the economy is recovering.
"We saw encouraging economic signs, including increases in airline passenger traffic and freight loadings, decreases in number of parked aircraft and decisions from airframers to increase narrow-body airplanes production rates in outer quarters," Safran CEO Jean-Paul Herteman said in a statement. "Our first-half performance leads us to review our full-year ambitions, the balance of opportunities versus the challenges is such that some upside is likely."
Safran group has tried to expand by acquiring smaller aerospace parts maker Zodiac but the company rejected the bid this month. At the same time, it might join forces with Thales, with which it competes in some sectors.
The French government, which owns a 27 percent share in Thales and a 30 percent share in Safran, would like to see both companies merge some of their activities to streamline production. It has punished the two companies for their resistance in doing so by freezing some $550 million of contracts with the companies.
Both companies will have to tighten their belts at home, as Paris has mulled defense budget cuts of up to $6 billion.
