October 21, 2015 / 5:40 AM / 3 years ago

UPDATE 2-Thales posts flat Q3 revenue, reaffirms targets

(Adds analyst call, shares)

PARIS, Oct 21 (Reuters) - France’s Thales reaffirmed its financial targets on Wednesday as it reported flat quarterly revenue brightened by a strong increase in orders.

Europe’s largest defence electronics company said its order intake rose 74 percent in the July-September quarter, led by an almost sevenfold increase in its Transport division, which won a London rail deal and an airport security contract in Oman.

Finance Director Pascal Bouchiat told analysts the company would be “extra vigilant” in supervising major sales contracts after a series of past cost overruns and said there were opportunities for observation satellite work in Saudi Arabia.

Thales posted third-quarter sales almost unchanged on an organic basis at 2.785 billion euros ($3.16 billion), compared with 2.719 billion a year earlier.

It returned to 3 percent growth in its recently underperforming Transport division, helping to push Thales shares higher in early trading, Paris analysts said.

At 0840 GMT, Thales shares were up 1 percent at 62.68 euros in a slightly weaker market.

A 43 percent increase in third-quarter Defence & Security orders also helped Thales deliver a positive book-to-bill ratio - a gauge of the strength of future business - of 1.13 at the end of the quarter compared with 0.9 a year earlier.

However, the company remained cautious on the speed at which the order flurry would translate into revenue.

Bouchiat told analysts it was too early to change the company’s outlook for “moderate” sales growth over the medium-term.

For 2015, Thales expects a low-single-digit percentage increase in sales and a 15 percent improvement in operating profit to 1.13-1.15 billion euros.

This month, Thales announced a A$1.3 billion deal to sell light armoured vehicles to Australia, beating competition from General Dynamics of the United States.

This week, the company announced the acquisition of data protection firm Vormetric for $400 million.

$1 = 0.8805 euros Reporting by Tim Hepher and Cyril Altmeyer; editing by James Regan and Jason Neely

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