PARIS (Reuters) -Shares in Safran rose on Friday after the French jet engine maker reported stronger-than-expected first-quarter revenues and said it was studying ways to manage the impact of global trade tensions.
Safran, which also makes landing gear, brakes and cabin interiors, said revenues rose 16.7% to 7.257 billion euros ($8.2 billion), led by engine spares and services.
Analysts on average expected revenues of 7.049 billion euros, according to a consensus compiled by the company.
Shares were up 3% at mid-session as the company also reaffirmed full-year targets, while boosting a subsidiary forecast for growth in spare parts revenue. It said the targets excluded any further tariff impact.
Safran said it was studying ways to lessen the impact of tariffs, including passing on a special tariff surcharge to customers such as airlines buying repair services and spares.
The company refused to join its U.S. engine partner GE Aerospace and other major aerospace companies in putting a value on the tariff disruption, saying it was premature.
Core civil and defence businesses continue to show “robust momentum,” CEO Olivier Andries said.
Safran co-produces LEAP jet engines for narrow-body Boeing and Airbus jetliners with GE Aerospace through their CFM International venture, the world’s largest engine maker by units sold.
Deliveries of the engines have been disrupted by supply chain problems.
The aerospace industry has been swept up in tariffs imposed by U.S. President Donald Trump on all imports plus what he has described as reciprocal tariffs on other trade partners.
Andries said Safran would apply a surcharge reflecting the tariffs and any retaliation as they evolve.
He also told reporters that it was in discussion with its own suppliers to limit the impact on its own costs, though industry sources said Safran and others had agreed to absorb some pain felt by suppliers.
Amid a swirl of policy signals from Washington and Beijing, Andries said China had decided overnight to exempt jet engines and some aircraft parts from tariffs on the United States.
Safran reported a 25% rise in civil spares revenues that analysts linked in part to delays in getting new jets.
“This illustrates the continuing windfall benefit of higher overhaul activity to keep old engines flying due to the shortage of new aircraft caused by the industry’s supply crisis,” Agency Partners Nick Cunningham said.
Safran confirmed a forecast of LEAP deliveries up 15% to 20% this year, despite a 13% drop in the first quarter.
($1 = 0.8825 euros)
(Reporting by Tim Hepher, Gianluca Lo Nostro; Editing by Christian Schmollinger, Mrigank Dhaniwala and Barbara Lewis)
