Airbus Q1 core earnings down 5 pct, confirms targets

PARIS Tue May 13, 2014 1:22am EDT

PARIS May 13 (Reuters) - Airbus Group posted a narrower-than-expected 5 percent drop in core earnings on Tuesday, despite lower aircraft deliveries and higher research and development spending, and reaffirmed its financial goals for the year.

The world's second-largest aerospace group after Boeing said its latest jetliner, the A350, was "progressing towards certification" in time for first delivery by the end of the year as planned.

First-quarter operating income before one-off items fell 4.6 percent to 700 million euros ($963 million) as revenue rose 5 percent to 12.6 billion.

Airbus Group reported another hefty outflow of cash in the first quarter as it boosts liquidity for major projects. Free cashflow before acquisitions came in at a negative figure of 2 billion euros, though this was less than the unusually weak level of 3.2 billion seen a year earlier.

Analysts were on average expecting the group's underlying quarterly operating income to fall 13.1 percent to 644 million euros on broadly flat revenue of 12.4 billion, according to a poll carried out for Reuters. ($1 = 0.7270 Euros) (Reporting by Tim Hepher and Cyril Altmeyer; Editing by James Regan)