UPDATE 1-Thales confirms targets after flat Q1 revenues

Tue Apr 29, 2014 12:33pm EDT

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PARIS, April 29 (Reuters) - France's Thales confirmed its 2014 financial objectives after posting flat sales in the first quarter, coupled with further evidence of busy demand for defence and security equipment in emerging markets.

Europe's largest defence electronics group by sales said quarterly revenue rose 1 percent on a like-for-like basis to 2.396 billion euros, led by a 7 percent gain in Aerospace.

The group's order intake rose 10 percent - or 13 percent in comparable terms - to 2.03 billion euros, led by a sharp upswing in defence and security deals in Latin America and the Middle East.

Thales reaffirmed targets for the year, including stable revenues and a double-digit percentage growth in new orders from emerging markets, which it expects will offset declines in defence spending in developed markets.

The 27 percent state-owned French group is also predicting a 5-7 percent increase in operating profit in 2014.

New orders in emerging markets make up a rising total of future business for the firm, reaching 30 percent of the group total in the first quarter, compared with 24 percent a year earlier.

Chief Executive Jean-Bernard Levy hopes this trend will eventually drag Thales out of a period of broadly flat revenues.

New orders in the quarter included an observation satellite for an unnamed European customer and a new urban security contract for Mexico City. Orders in the Middle East more than trebled compared with the first quarter of 2013, Thales said.

Aerospace and Transport orders fell compared with an unusually strong base in the first quarter of last year.

First-quarter numbers are rarely taken as a definitive guide for the year ahead, with many government contracts agreed or paid for towards the end of the year, according to aerospace and defence analysts.

Thales shares closed unchanged earlier at 44.72 euros.

(Reporting by Tim Hepher; editing by Geert De Clercq)

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