Safran makes mixed changes to forecasts after jet engine delays By Reuters

PARIS (Reuters) -French jet engine maker Safran (EPA:) trimmed its revenue forecast for the year but nudged its profit goal higher after supply bottlenecks delayed deliveries of LEAP engines.

The French company, which co-produces the engines with GE Aerospace through their CFM joint venture, said nine-month revenues grew 17.4% to 19.686 billion euros led by Equipment and Defence activities and Aircraft Interiors.

It joined its U.S. partner in predicting 10% fewer LEAP deliveries in 2024, compared with a previous target of flat to 5% growth, and revised down its full-year revenue target to 27.1 billion euros ($29.32 billion) from 27.4 billion.

The company, however, predicted a 2024 recurring operating income of around 4.1 billion euros, up from a previous target close to 4.0 billion euros, citing a strong performance so far this year. It only reports revenues at the nine-month stage.

“The main risk factor is the supply chain production capabilities,” Safran said in a statement on Friday.

Jet engines are typically sold for little or no profit at the outset, or even at a loss, with manufacturers making their profit in services spread over the life of the engine.

Safran’s widely watched civil aftermarket revenues rose 26.2% in the first nine months, with the group targeting mid-20s percentage growth for the full year.

Core propulsion revenues rose 11.9% over the same period.

Safran said plans by the French government to implement a temporary increase in corporation tax could cost it 320 million to 340 million euros in 2024. Prime Minister Michel Barnier has announced targeted tax hikes for France’s biggest companies and wealthiest individuals to help narrow a gaping budget deficit.

($1 = 0.9242 euros)