GKN Sales Rise 12 Percent as Airbus, Boeing Seek Output Records
GKN Plc (GKN), a supplier of parts to Boeing Co. (BA) Dreamliners and Airbus SAS A350 long-range jets, reported a 12 percent gain in first-half sales on higher production rates at the two largest planemakers.
Revenue reached 3.9 billion pounds ($6 billion), the Redditch, England-based GKN said today in a statement. Three analyst surveyed by Bloomberg estimated 3.7 billion pounds. Pretax profit advanced 5 percent to 278 million pounds.
Boeing and Airbus have raised output to record levels and are on track for combined delivery of more than 1,200 airliners this year, lifting volumes at major suppliers. GKN has focused increasingly on commercial plane work and last year acquired Volvo AB (VOLVB)’s aerospace unit to bolster sales.
“Although some of our end markets remained challenging, we continued to outperform and are reporting good underlying financial results, with further benefit from last year’s acquisition,” Chief Executive Officer Nigel Stein said in the statement. “With planned restructuring costs now behind us, we expect a stronger second half performance and to deliver good progress in 2013.”
Sales growth at the aerospace business grew 46 percent to 1.1 billion pounds, bolstered by Volvo Aero, which contributed 327 million pounds. Commercial aerospace activities now represent 71 percent of unit revenue. GKN said slow sales in industrial and construction markets will lead revenue for the business line to come in below the first half’s 487 million pounds and below 2012 levels.
The automotive unit benefitted from a slight gain in vehicle production that helped lift sales at the Driveline division by 4 percent to 1.7 billion pounds.
GKN shares have advanced 43 percent this year valuing the business at 5.4 billion pounds. Net debt rose to 928 million pounds.
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