Airbus is battling Boeing for aircraft orders

EADS, which owns 80% of Airbus, added it expected sales of about 30bn euros in 2004, provided it hits its delivery target of 300 Airbus aircraft.

It predicted operating profits would be 1.6bn euros next year, below analysts' forecasts of 1.8bn euros.

Last year, Airbus delivered more planes than rival Boeing for the first time.

Defence sales

"This is not a profit warning but it's lower than most people's expectations," according to one aviation analyst quoted by Reuters.

EADS plunged into the red in 2003, posting a first half loss of $76m, a dramatic contrast to the $105m profits made a year earlier.

EADS said then that Sars and the Iraq war had made for "a difficult year" for sales of civilian aircraft.

Stronger defence sales in 2004 should help compensate for any weakness in civil aviation market, EADS said.

Its latest trading update included a prediction that it would manage 2003 core profits - before interest and tax - of 1.4bn euros on sales of 30bn euros when it unveils its full year results on 8 March.

EADS is in the midst of a costly restructuring of its space division to improve profitability.