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Thales shares plunge after profit warning
Paris (UPI) Nov 11, 2009 Shares of French defense giant Thales fell steeply in Wednesday trading in Paris, a day after the company issued a profit warning because of problems liked to its aerospace business. Thales shares were down 3.12 percent at the end of Wednesday trading, contrary to the overall performance of the French stock index SBF120, which was up by 0.73 percent. On Tuesday Thales posted lower-than-expected third-quarter sales and issued a profit warning for the remainder of the year because of charges linked to its products in the aerospace sector. Experts say Thales is overstretched by several large aerospace contracts; it had to pay a $130 million fine because of the delay in the Airbus A400M military plane, to which it is a key supplier. Recently appointed Thales CEO Luc Vigneron said in a statement that more charges likely await the company, with the difficulties to "continue to impact profitability for the rest of the year." Moreover, the "downturn in civil business worsened in the third quarter, particularly in regional aircraft and helicopters, whereas support activities have stabilized for the moment," Thales said in a statement. As a consequence, the company is slated to announce asset sales over the next few months. On the other hand, it was reported recently that Thales plans to raise its stakes in Direction des Constructions Navales Services, a naval systems company that is building warships. Thales seeks to boost its share in DCNS to 35 percent from 25 percent, Defensenews.com reports. "Lifting the stake in DCNS would boost synergies for DCNS and Thales, as the main task facing industry is the managing of integration risk, which comes from the complexity of systems," Marc Darmon, head of Thales' naval division, was quoted as saying by Defensenews.com. Thales in 2007 bought a 25 percent stake in DCNS that came with significant operational powers. A Dec. 10 board meeting could decide future acquisitions in DCNS. Paris-based Thales is an electronics company with 68,000 employees. It makes electronic devices and weapons systems used in military and civil airplanes and ships. Thales has designed Britain's Future Carrier and will build a drone for the British air force. Operating in more than 50 countries, Thales is one of the 10 largest defense contractors in the world. Share This Article With Planet Earth
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