February 28, 2017 / 6:05 AM / 6 months ago

French group Thales posts 11 pct rise in 2016 operating profit

PARIS, Feb 28 (Reuters) - France's Thales reported a slightly brisker than expected 11 percent increase in operating earnings for 2016 and predicted further growth in profits and operating margins this year as its transport business exits the doldrums.

Last year's profit growth outpaced a 5.8 percent rise in revenues to 14.885 billion euros ($15.8 billion), or 6.8 percent on an organic basis, led by avionics and in-flight entertainment systems.

The defence and high-tech systems company posted operating earnings of 1.354 billion euros.

That lifted its margin by 50 points to 9.1 percent, as cost cuts enabled its transport unit to post profits, even though a series of weak contracts there remains a concern.

The group took in 13 percent fewer orders, worth 16.5 billion euros, compared with 2015 which had been buoyed by the radar for two French Rafale fighter deals with Egypt and Qatar.

Analysts were on average predicting 2016 operating profit of 1.308 billion euros on revenue of 14.851 billion, according to Thomson Reuters I/B/E/S data.

For 2017, Thales predicted a mid-single digit organic growth in sales and operating profit of 1.48-1.5 billion euros.

It confirmed average targets of mid-single-digit organic sales growth in the 2016-2018 period and 9.5-10 percent operating margins in 2017-18.

$1 = 0.9444 euros Reporting by Tim Hepher, Cyril Altmeyer,; Editing by Sudip Kar-Gupta

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