Zodiac Warns on Profit for Ninth Time in Two Years

  • Seat maker signals higher-than-expected provisions at year end
  • Raymond James cuts its already below-consensus estimates again

Aircraft-seat manufacturer Zodiac Aerospace SA said earnings will be below analyst estimates, the ninth time in two years it’s warned of disappointing profits.

The shares rose 2.4 percent to 20.92 euros at 3:30 p.m. in Paris, erasing a drop of as much as 4 percent. Profit in the year ended Aug. 31 missed estimates because of higher-than-expected provisions to settle lawsuits, agreements on delivery schedules with some customers, and continued weakness in the helicopter market, the Plaisir, France-based company said in a statement late Friday.

Zodiac struggled to meet Airbus Group SE and Boeing Co. delivery schedules for two years after taking on too much work. The company said in June it had achieved certification of a new business-class seat being built for Airbus’s latest A350 model jet, allowing it to restart shipments.

Analyst Harry Breach at Raymond James cut his already below-consensus earnings estimate again by between 5 percent and 8 percent, retaining the “market perform” rating.

Current operating income in the year just ended was about 10 percent below analyst estimates, while sales were in line with expectations, Zodiac said. The company’s ratio of net debt to earnings before interest, tax, depreciation and amortization is within the limits set in a financing agreement, it said. Zodiac plans to announce sales for the fiscal year on Sept. 14 and earnings on Nov. 22.

(Corrects time frame in headline, first paragraph to two years.)
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