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Thales down on space biz margin worries



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** Thales TCFP.PA shares fall 5%after the defence electronics company posts weak margins in its space business and cuts outlook for the segment, even as it beats forecasts for groupnew orders and EBIT

** Thales says EBIT margin in the space segment was negative due to the lack of growth in the business and R&D costs

** FY EBIT margin in the unit will be negative, Thales says, due to falling demand for commercial telecom activities

** Sources have said that Thales and Airbus AIR.PA are talking to combine some space activities to better compete with U.S giants

** "The Aerospace margin surprised to the downside given well-flagged challenges in the space segment, although encouragingly this underperformance was offset elsewhere in the group," says Berenberg

** New orders signed in H1 jump 26% to 10.77 bln euros and beat expectations, helped by demand for military gear, while H1 EBIT of 1.10 bln slightly ahead of consensus

** Shares head for their worst day in more than one month


($1 = 0.9192 euros)



Reporting by Olivier Sorgho and Pauline Foret

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