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Commercial Air Sales Turn EADS Back to Profitability

Sales of their Airbus commercial airliners has somewhat tempered EADS (EADS:P) feelings about losing the KC-X contract to rival Boeing (BA). In the last year thanks to large orders the European aerospace company returned to profitability after a few years of struggles.

Revenue in 2010 was over $60 billion and the company earned a profit of around $1.5 billion. The company has also been able to increase its cash holdings dramatically with an eye on expanding U.S. defense business through acquisitions.

Boeing and EADS unlike other large defense contractors do have the commercial aviation market to help temper ups-and-downs in military spending. They are though soon to be facing more competition from companies like China’s CAI who especially want to enter there own domestic airline market.

EADS has carefully looked at different potential acquisitions in the U.S. to help grow its nascent defense work there. Certainly they now have the necessary funds to do even a rather large one although something like buying Northrop Grumman’s (NOC) shipbuilding group would seem a little too large and ambitious. EADS will most likely target a medium sized defense contractor who provide services or limited hardware.

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