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Airbus management seek to halt share price slide

Airbus's company logo is pictured at the Airbus headquarters in Toulouse, December 4, 2014. REUTERS/ Regis Duvignau

By Victoria Bryan and Blaise Robinson

BERLIN/PARIS (Reuters) - Airbus (AIR.PA) sought to reassure investors on Thursday by promising profit growth beyond 2017 and healthy dividends after its shares continued a slide begun on Wednesday when it warned of flat 2016 earnings.

Investors also worried about a cut in production rates for the A330 as Airbus moves to a newer version of the wide-bodied plane, dubbed the A330neo, and as it ramps up production of its new A350.

"Yes, there is a risk the rate will come down, but this is not the point," Chief Financial Officer Harald Wilhelm said during the second day of an investor event in London.

"The point is that this is the way forward for the neo that will then ramp up and that will provide a clear bridge into profitability."

Shares in Airbus fell 4 percent on Thursday, adding to a 10.4 percent drop in the previous session, their worst performance in more than six years.

The Wednesday plunge represented a wipeout in the company's market value of 3.9 billion euros ($4.9 billion), roughly the price of a dozen Airbus A380 jumbo jets.

Airbus sales chief John Leahy sought to ease fears of slightly lower margins on the A320 single-aisle plane by saying Airbus was currently commanding a premium price for the A320neo and that the price for the older version was holding steady.

Wilhelm added divestments would boost dividends as the group embarks on a program to streamline its defense and space portfolio. [ID:nL6N0TV28B]

The investor day was also overshadowed by the future of the A380 program. The head of Airbus' planemaking unit said on Thursday the group would "one day" re-engine or stretch the A380.

A suggestion that Airbus could stop making the plane after 2018 drew an angry reaction from the jet's biggest customer, Emirates, which said it could double its investment if the planemaker agreed to upgrade the A380 instead.

Some analysts and traders were of the view that the sell-off in Airbus' stock was overdone, but they also noted additional concerns that falling oil prices would reduce airlines' incentive to buy new, more fuel efficient aircraft.

"Over the course of the last year, estimates perhaps didn't come down enough to incorporate A330 pressures and arguably needed to be reset in our view," Barclays analysts wrote in a note.

UBS raised its earnings forecast by 2 percent for 2015, but cut it by 5 percent for 2016, 15 percent for 2017, and 10 percent for 2018.

(Additional reporting by Cyril Altmeyer and Tim Hepher; Editing by Andrew Callus and Maria Sheahan)