Update: A bumpy H1 as deferrals hit MRO, FY guidance and our estimates
MTU’s H1 results were marked by diverging lines of guidance: FY14 revenues cut by 3%, EBITguidance unchanged, and net income guidance increased by 4%. The key drivers of these changes are the weakening dollar/euro rate, and some contract deferrals in the engine maintenance, repair and overhaul (MRO) division. However, EBIT and net income benefit from a faster than expected fall in R&D (as work on the P&W Geared Turbo Fan (GTF) moves into production), and a lower tax rate (reflecting the greater amount of work being done in Poland and China). Overall, we modestly raise our 2014e earnings forecasts,but cut them by up to 6% for 2015e and 2016e.
MTU Aero Engines manufacturers engine modules and components, and providers MRO (Maintenance, Repair and Overhaul) services for commercial aero engines. Co.'s activities range through the development, construction, testing and production of new commercial and military engines and spare parts, through to maintenance, repair and overhaul of commercial and military engines. Co.'s segments comprised of: OEM business (Original Equipment Manufacturing), which covers new commercial engines, including spare parts, and the whole of the military sector; and MRO business, which engaged in commercial maintenance activities covering the areas of maintenance and logistical support for commercial engines.
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