This is a securities class action against European Aeronautic Defence & Space Co. and certain officers and directors alleging EADS and certain of its officers and directors with violations of the Exchange Act.
EADS manufactures airplanes and military equipment. EADS produces commercial aircrafts, including the various Airbus models, military fighter aircrafts, military and commercial helicopters, missiles, satellites, and telecommunications and defense systems.
The class action complaint alleges that, throughout the Class Period, EADS falsely assured the investing public that it would overcome the technical problems in the production of EADS's Airbus A380 commercial jets ("A380") and it would be able to meet its year-end delivery deadlines. EADS issued numerous positive statements which described EADS's increasing financial performance.
According to the class action complaint, these statements were materially false and misleading because they failed to disclose and misrepresented the following adverse facts, among others:
(i) that EADS was experiencing insurmountable delays in the manufacture of the A380 commercial jet;
(ii) that EADS would be required to compensate its customers for these delays through discounts and certain customers would likely be canceling their entire orders; and
(iii) that, as a result of the foregoing, EADS's ability to receive new contract awards from commercial airliners and its ability to reap future revenues at the levels that it was projecting would be in serious doubt.
On June 13, 2006, EADS announced that its Airbus subsidiary was having production problems with the A380 commercial jet, which would cause a significant delay in delivery to its customers. EADS also issued a profit warning beyond 2006 which was attributable to these delays and announced that it anticipated annual shortfalls of EUR 500 million, without taking into account possible contract terminations from existing customers.
Upon this announcement, shares of EADS fell EUR 6.69 per share, or 26%, to close at EUR 18.73 per share, on unusually heavy trading volume.
Name (Stock Symbol)
European Aeronautic Defence and Space Company EADS N.V.
European Aeronautic Defence and Space Company EADS N.V. manufactures airplanes, helicopters and defense related vehicles and products.
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