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Safran Q3 Revenue Up On Aircraft Demand

Safran's third-quarter revenue rose 6.8 percent to EUR€3.589 billion (USD$4.54 billion), driven by demand for new aircraft.

The maker of aero engines, military and security equipment said the commercial aviation market, which has generated record production levels as airlines upgrade their fleets to reduce fuel bills, remained "very active".

Safran said it would easily meet 2014 profit forecasts, as aerospace investors put aside recent concerns over the economy.

The widely watched aftermarket for civil aero engines rose 11.9 percent in dollar terms in the third quarter and 10.3 percent in the first nine months of the year.

"The mix in our civil aftermarket is of such good quality in terms of profits that we are very easily and comfortably confirming our profit outlook for the full year," Deputy CEO and Finance Director Ross McInnes said.

For 2014, Safran is targeting a percentage growth in the "mid-single digits" for revenue and "approaching the mid-teens" for its core operating income, based partly on a percentage growth of the civil aftermarket in the "low to mid-teens".

As in 2013, its cash goals are subject to uncertainty over the timing of government advances due in the last quarter.

CFM, Safran's aero engine joint venture with GE, has seen more resilient demand than it originally expected for current-generation CFM56 engines, which continue to be sold at "good prices and production costs", McInnes said.

Development of the JV's new LEAP engine is "well on track" following a first test flight earlier this month, chief executive Jean-Paul Herteman said.

Asked to comment on the search for a potential replacement when his mandate as chairman and CEO expires in the spring of 2015, Herteman said Safran had hired outside recruitment experts and that the board-managed process was going "very smoothly".

The 63-year-old has not confirmed whether he will seek to stay at Safran when he reaches the current age limit next year, but is widely expected to step back at least from the CEO role.