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2Q intl earnings highlights: Airbus revels in cyclical sweet spot

Airbus' shares have doubled from their pre-crisis peak eight years ago thanks to a relentless flow of orders from Asia.Photograph by Eric Cabanis — AFP/Getty Images

Shares in Airbus NV soared after the company reported a 31% rise in second-quarter net profit to €696 million, dispelling what appear to be premature fears that the airliner business is approaching the end of a cyclical sweet spot. The company, which booked orders and commitments for 496 planes at last week’s Farnborough Air Show, said revenues were up 6% on the year–ahead of expectations–and upheld its forecast for this year and next. It said that its new wide-bodied airliner project, the A350 XWB, “remains challenging”, however. Analysts at Barclays said first deliveries are likely to be on time later this year, but that there are question marks further over the company’s ability to ramp up production as it hopes.

U.K. bank Barclays Plc (BCS) saw its shares rise 4.0% despite a new 900 million-pound ($1.52 billion) charge for mis-selling insurance to clients and a wretched performance at its investment bank. Group pretax profit fell to GBP1.66 billion in the second quarter, down 8.7% from a year earlier, but the market chose to focus on a strong performance by the retail and commercial lending operations that will be Barclays’ focus in future. There was also relief that the near-50% drop in profit at the investment bank wasn’t any bigger. Having only just emerged from scandals around the rigging of benchmark interest rates, Barclays is one of a number of European banks now facing investigation from U.S. regulators into possible malpractice at its ‘dark pool’ trading platform.

Like its U.K. rival BP Plc (BP), French oil major Total SA (TOT) is struggling with a major strategic problem after the imposition of sanctions against Russia, where it is one of the biggest foreign investors, and which accounted for nearly 10% of its output last year. The company is heavily involved with gas producer OAO Novatek, now under U.S. sanctions, but chief financial officer Patrick de La Chevardiere told a conference call that Total stopped buying shares in Novatek the day that flight MH17 was brought down (also the day after the U.S. banned it from the U.S. capital markets), and said it would “take stock” of the situation at their joint Yamal LNG project at the end of August. Group net profit fell 11% from a year earlier on problems at its other operations in Kazakhstan and elsewhere. The shares fell 2.3%.

Bayer AG, Germany’s largest pharma and chemicals group, said net income rose 13% to €953 million, helped by “very encouraging sales” after recent drug launches and a strong performance by its North and Latin American CropScience business. Pharma sales were up 10% on the year. It said the euro’s strength took €160 million off basis operating earnings, but repeated its guidance for the full year of an increase of around 5% in core operating profit. The shares rose 2.7%.