PARIS (Reuters) - Airbus parent EADS (PAR:EAD) pledged to demonstrate a "strong commitment to shareholders' returns" in future dividends and announced a lower than expected penalty on profit goals from early development of the A350 jet, sending its shares higher.
The aerospace company said a dividend policy to be outlined to investors later on Wednesday would "target a sustainable growth in the dividend within a payout ratio of 30-40 percent".
EADS reaffirmed a target of a 10 percent operating margin by 2015 before one-off items and excluding dilution from the upfront development costs of the A350. This was based on a euro exchange rate of $1.30.
Including the A350, this target translates into a 7-8 percent margin, based on an exchange rate of $1.35, the company said in an annual investor briefing.
"We believe that expectations for A350 dilution had been cautious heading into the event, and so this is rightly being seen as a positive surprise," said RBC Capital Markets analyst Rob Stallard in a note.
The group also set a target to be above breakeven in terms of free cash flow in 2014 and 2015.
Shares in EADS jumped after the statement, up 6.8 percent at 52.50 euros by 1414 GMT, the top gainers on the French blue-chip CAC 40 index (.FCHI), and almost reversing a 7.4 percent decline in the previous six days.
Chief Executive Tom Enders told analysts the A350 development was "progressing well" and reaffirmed plans to put the lightweight jet into service in the second half of 2014.
Finance Director Harald Wilhelm said Airbus was expected to meet a breakeven target on the Airbus A380 superjumbo in 2015 following a recent deal to sell 50 jets to Emirates airline, according to a webcast of an investor event.
There had been doubts over whether Airbus would meet the goal due to a shortage of orders.
The focus at Europe's largest aerospace company turned to financial goals after EADS said earlier this week it would cut 5,800 jobs as part of a three-year reorganization of its defence and space activities.
Designated EADS defence and space chief Bernhard Gerwert said in a presentation that he expected a total reduction of 5,290 full-time equivalent posts through 2017.
EADS added that following its decision to rebrand the company as Airbus Group from 2014, it would change its stock symbol to "AIR".
(Reporting by Tim Hepher, Blaise Robinson; Editing by James Regan)