PARIS: The parent company of Airbus, said Tuesday that first quarter profit fell 40 percent as the plane maker delivered fewer jets and took a euro120 million charge for its troubled A400M military transport plane.

European Aeronautics Defense and Space Co. said net profit in the January to March quarter fell to euro170 million ($230.76 million) from euro285 million a year ago — lower than analysts' expectations.

Revenue fell 14 percent to euro8.5 billion in the quarter from euro9.9 billion in the same period last year.

Much of the trouble was at Airbus, which booked 22 orders in the quarter but also took 14 cancellations, bringing net orders to only eight for the period. That compared to 395 net orders made in the first quarter of 2008.

Analysts say the planemaker may be saving announcements of new orders for the Le Bourget air show in June, but EADS said it "is becoming more challenging" for Airbus to meet even a reduced goal of 300 new aircraft orders this year.

The recession is hurting Airbus, which accounts for two-thirds of EADS' revenue, as customer airlines delay orders and deliveries. At the same time, EADS is spending precious resources on penalties and other charges due to with the A400M.

Five analysts surveyed by Thomson Reuters forecast net profit at euro200.80 million and revenue at euro9.52 billion for the quarter. Shares fell 5.9 percent to euro10.56 in Paris morning trading.

Credit Suisse analyst Steve East said in a research note that results are "weak" as Airbus cut prices more than anticipated.

"Overall, the company has missed our forecasts and consensus at every level — driven by worse pricing and mix issues at Airbus than we had forecast — and there was a significant free cash outflow — which we were not expecting at this stage of the cycle, i.e. before any production cuts," East wrote.

Airbus said it cut prices on the 116 aircraft it handed over in the first quarter, compared to 123 delivered in the same period last year.

It did not specify by how much, but East said Airbus' revenues of euro5.88 billion — a 21 percent drop from a year earlier — were euro1.1 billion below his forecast. Airbus earnings before interest and tax (EBIT) dropped 86 percent to euro89 million.

EADS has indefinitely postponed the first flight of the A400M transport and is now negotiating new technical requirements and commercial terms with the seven European NATO countries that first ordered the plane.

The company could have to repay as much as euro5.7 billion to governments if the project were canceled but it has said that is "very unlikely."

The A400M has cost EADS euro2.3 billion in penalties and other charges including the first-quarter charge, and the company warned there could be more to come.

EADS said its "solid defense and institutional order book provides a certain level of protection and stability" as its cyclical commercial airline business sags.

The company said it expects to have to help customers with financing this year, but did not have to in the first quarter.

EADS said it had cash reserves of euro8.7 billion, compared with euro9.2 billion at the end of last year giving it a "robust liquidity base in unpredictable economic times." But it said lower customer advance payments at Airbus and a build-up of inventory will hurt cash flow.

Arch-rival Boeing Co., which makes commercial and military jets, reported last month that first quarter profit dropped by half. It earned $610 million in the quarter compared with $1.21 billion during the same period last year.

EADS reiterated that excluding the financial impact of A400M program it expects full year EBIT to remain "significantly positive" but to fall from last year's euro2.8 billion.