May 13 - Airbus has posted better than expected first-quarter earnings. As Sonia Legg reports it sparked a relief rally in its shares which helped European markets to a six-year high.
It was a welcome take off for Airbus - shares up 6%. The world's second-largest aerospace group had dropped 11% since the start of 2014. But first quarter results show it has dodged the impact of higher costs for its new A350. Testing is going well and the jet should get its key safety certificate by the end of the summer. Airbus also exceeded profit forecasts by around 10% - good news says BGC's Mike Ingram. (SOUNDBITE) (English) Mike Ingram, Market Analyst, BGC Partners, saying: "If you look at both order intake and order backlog they have been pacing Boeing for some time - on order backlog they have actually pulled ahead of Boeing. The results today were extremely reassuring - it was about a 6% beat, they've maintained their forward guidance for the full year and clearly investors like the look of what they have to say." The rally helped European shares. The key FTSEurofirst 300 hit its highest level since in six years while Britain's FTSE 100 topped a 14-year high. (SOUNDBITE) (English) Mike Ingram, Market Analyst, BGC Partners, saying: "It does seem that Europe has turned the corner on the economy, the U.S. seems to be working through its soft first quarter. We know that the UK ecoomy is going from strength to strength and even if the situation in emerging markets, in China etc, isn't resovled at least it seems to have stabilised." Disappointing news from Germany helped the rally. A survey showing a sharp decline in investor morale in Europe's biggest economy bolstered bets the ECB will ease monetary policy further next month. The rebound also eclipsed rising tensions in Ukraine where pro-Russian rebels are threatening to break up the country. So far global equity markets have largely brushed off a disputed weekend referendum organised by pro-Moscow rebels set on self-rule.