UPDATE 1-Safran operating profit up 23 pct in H1

Tue Jul 31, 2012 1:08am EDT

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* Revenue up 14.1 pct to 6.413 bln euros

* Civil aftermarket up 8.1 pct in H1

* French group reaffirms full-year forecast

PARIS, July 31 (Reuters) - France's Safran unveiled a 23 percent rise in first-half operating income boosted by currency gains and acquisitions and reaffirmed its forecasts for the year as aerospace continues to grow faster than the rest of the economy.

Revenues at the maker of jet engines, infra-red army goggles and airport scanning equipment rose 14 percent to 6.4 billion euros, representing 5.2 percent growth on a like-for-like basis.

Profits benefited from record aircraft production as Airbus and Boeing tap into transport growth in emerging markets and demand from Western airlines for greater fuel savings, but the second quarter also saw a slowdown in sales of engine parts.

Recurring operating profit grew to 681 million euros or 662 million after one-off items.

Analysts were on average expecting operating income of 652 million euros on revenues of of 6.429 billion, according to Thomson Reuters I/B/E/S consensus data.

In a key indicator, Safran reported low double-digit growth in spares revenue for CFM jet engines that power the bulk of the world's short- or medium-haul airliner fleet, co-produced with General Electric.

The figure is under the spotlight after U.S. rival United Technologies halved its forecast for 2012 growth in commercial spares at engine unit Pratt & Whitney to 5 percent.

Safran said total civil aftermarket revenues rose 8.1 percent in the first half, in line with a full-year forecast of high single-digit growth. This included a "flattish" performance in larger engines after 3 years of strong growth.

In the first quarter, the civil aftermarket had risen 15.1 percent driven by 24.2 percent growth in CFM spares revenue. The company has stopped reporting CFM spares revenue separately.

Although traffic is increasing and aircraft and engine producton are running at record levels, some airlines are limiting spending on spares to save cash, affecting an area in which engine makers make their strongest margins.

Safran Chief Executive Jean-Paul Herteman said the large installed base worldwide of CFM jet engines would nonetheless provide "several years of expansion" in aftermarket services.

Net income grew 30 percent in the first half.

Safran reaffirmed its growth forecasts for the full year including revenues slightly above 10 percent and recurring operating income of around 20 percent.

CFM and Pratt & Whitney compete to provide engines on Airbus medium-haul A320-family jets, while CFM is the sole engine supplier for similar Boeing 737 aircraft.

(Reporting by Cyril Altmeyer, Tim Hepher; Editing by Christian Plumb)

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