Italian aerospace and defense group Finmeccanica SpA (FNC.MI)
said late Monday that the possible cancellation of a U.S. contract
for the VH-71 presidential helicopter program won't have an impact
on the group's earnings.
In a filing to the Italian stock exchange Web site, the company
added that since the value of the Increment 2 phase of the program
was not included in Finmeccanica's budget nor in its multi-year
plan, "there are no changes to the guidance provided to the
market."
According to Italian news agency ANSA, U.S. Defense Secretary
Robert Gates said earlier Monday he was proposing halting the
presidential helicopter program in which AugustaWestland, a unit of
Finmeccanica, was involved, together with Lockheed Martin (LMT),
citing unsustainable costs.
In its statement, Finmeccanica referred to the proposal as "only
the first step in a particularly complex budget approval."
It added, however, that the potential cancellation of the
program would entitle Finmeccanica to receive a penalty payment for
breaching the contract.
The company claims the potential cancellation of the program is
in no way related to the technical features of the helicopter, nor
to the platform costs, which it deems highly competitive.
The first phase of the program, Increment 1, has been already
authorized by Congress and is worth $3.7 billion, $1 billion of
which will go to Finmeccanica's unit AugustaWestland.
The contract, which runs until 2011, involves the development of
nine helicopters, eight of which have already been delivered.
-By Enza Tedesco, Dow Jones Newswires; enza.tedesco@dowjones.com