Dassault Aviation H1 profit down, cuts Falcon delivery forecast

PARIS (Reuters) - Dassault Aviation on Thursday posted lower first-half operating income and revenue, hurt by a battle over prices in the weak business jet market, and reduced its forecast for Falcon business jet deliveries to 50 aircraft from 60 for 2016.

The family-controlled aerospace firm, which also builds Rafale warplanes, said it had concluded discussions aimed at the sale of 36 combat jets to India and was waiting for a final Indian government decision before the deal could be signed.

First-half operating profit fell to 125 million euros($137.66 million) from 144 million as revenue slipped to 1.662 billion euros from 1.675 billion.

Dassault also slowed down R&D spending.

Analysts were on average expecting stable operating profit of 143 million euros on sales of 1.51 billion, according to Thomson Reuters data.

Chief Executive Eric Trappier said the first half had been marked by economic and geopolitical uncertainty, including the decision by UK voters to leave the European Union, prompting some buyers to defer taking decisions on purchasing luxury jets.

"There is strong pressure on prices across the whole (Falcon) range," he told a news conference.

"This price war comes not only from the (new) market but also second-hand planes," he added.

Falcon revenues fell to 853 million euros from 919 million as Dassault delivered 15 jets, three fewer than the first half of last year. New orders for the jets fell to 22 from 25.

Dassault said it expects to deliver its first Falcon 8X version in the fourth quarter as planned. The Falcon 5X has already been pushed back to 2020 from 2017 due to problems in developing the Silvercrest engine at France's Safran.

The company reaffirmed its full-year revenues were expected to fall in 2016, compared with 2015, which had been boosted by a Mirage 2000 fighter modernisation project in India.

($1 = 0.9080 euros)

(Reporting by Tim Hepher, Cyril Altmeyer. Editing by Jane Merriman and Susan Thomas)