Safran Raises Outlook Following Record Operating Margin and Strong Demand
Safran's Financial Performance and Upgraded Outlook
First-Half Profit and Revenue Highlights
PARIS, July 28 (Reuters) - French jet engine maker Safran joined its partner GE Aerospace in raising financial targets after posting stronger-than-expected first-half profits on Tuesday.
The French company, which is one of the world's largest aerospace equipment suppliers as well as co-owning the CFM engine joint venture with GE, said strong demand for spare parts contributed to a record first-half operating margin of 18.4%.
CFM Engine Joint Venture and Maintenance Profits
CFM, the world's largest jet engine maker by the number of units sold, is reaping maintenance profits from its CFM56 jet engines, which continue to power thousands of planes despite being succeeded by the more recent LEAP for current narrow-body deliveries.
Key Financial Metrics
Safran said its mid-year recurring operating profit jumped 29% to €3.24 billion ($3.68 billion), while revenue rose 19% to €17.57 billion. Widely watched sales of spare parts for civil engines rose 27.9% in dollar terms.
Analysts were on average expecting recurring operating profit of €3.06 billion on revenue of €17.47 billion.
Performance by Division
Propulsion Division
Safran's core Propulsion division, which brings in just over half the company's sales, posted a 28% earnings rise to €2.25 billion, while Equipment & Defense rose 29% to €907 million.
Aircraft Interiors
Aircraft Interiors continued a gradual turnaround with a profit of €54 million, up from €27 million.
Upgraded Full-Year Outlook
Revenue and Operating Profit Targets
Safran raised its percentage target for full-year revenue growth to the "mid-teens" from a previous "low-to-mid-teens".
Safran also predicted full-year operating profit of €6.4 billion to €6.5 billion, up from a previous goal of €6.1 billion to €6.2 billion, and raised its forecast for growth in LEAP engine deliveries to "high teens" from a previous target of 15%.
Industry Context
GE Aerospace last week raised its 2026 revenue and profit forecasts, driven by demand for engine services and equipment.
($1 = 0.8797 euros)
(Reporting by Tim Hepher; Editing by Jamie Freed)
