October 31, 2019 / 7:01 AM / a month ago

UPDATE 1-France's Safran maintains outlook as Q3 sales rise

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Oct 31 (Reuters) - French aerospace supplier Safran SA on Thursday reaffirmed its recently upgraded full-year financial outlook as it posted higher third-quarter revenues, buoyed by sales of current-generation civil and military jet engines.

Revenues rose 14% from a year ago to 6.1 billion euros ($6.8 billion).

Safran, which co-produces civil jet engines with General Electric, also confirmed a goal of producing around 1,800 new-generation LEAP engines in 2019 based on Boeing’s current production rate for the grounded 737 MAX jetliner.

Boeing cut production of the LEAP-powered 737 MAX to 42 aircraft a month after it was grounded in March, keeping its assembly lines running at a slightly reduced rate in order to avoid stop-start disruption to its supply chain.

It looks set to maintain that level based on a possible return to service in the United States during the fourth quarter, while Boeing has said it aims to resume rises in output towards 57 a month by end-2020 once the plane is flying.

Safran Chief Executive Philippe Petitcolin told journalists he would discus the production schedule with Boeing once the aircraft was back in service.

Safran, whose cashflow has been hurt by the grounding as it faces a shortfall in engine payments, said CFM had reached an agreement with Boeing allowing it to receive an unspecified amount of advances on LEAP engines delivered to Boeing in 2019.

The firm said its widely watched aftermarket for spares and services grew 9.8% in the first nine months, including 9.2% in the third quarter.

In September, Safran raised its full-year forecasts after reporting stronger than expected first-half profits, and the company stuck to those forecasts on Thursday.

Safran expects adjusted recurring operating income to grow well above 20% and for revenue to grow around 15% in 2019 compared to 2018.

$1 = 0.8960 euros Reporting by Tim Hepher; Editing by Sudip Kar-Gupta, Rashmi Aich & Shri Navaratnam

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