(Recasts, adds details)
By Tim Hepher
PARIS, April 26 (Reuters) - French aero engine maker Safran outpaced revenue growth plans in the first quarter and stuck to its goals for the year despite the grounding of the Boeing 737 MAX, sending its shares higher on Friday.
Safran said its CFM International joint venture with General Electric continues to deliver LEAP engines to Boeing as it catches up on earlier engine production delays, but would adapt its output as necessary.
The disclosure suggests Safran is not yet facing a build-up in inventory of engines for narrow-body aircraft, allaying concerns among some analysts about a costly drain on its cash.
Safran shares rose more than 2 percent after it posted quarterly underlying revenue up 12.6 percent, outstripping the pace set by a 2019 like-for-like growth target of 5 percent.
CFM produces engines for the Boeing 737 and competes with Pratt & Whitney to sell engines for the Airbus A320neo.
Boeing halted deliveries of the 737 MAX in March after regulators grounded the plane in the wake of two fatal accidents. It continues to produce the plane but at a slower rate of 42 airplanes per month instead of 52. Starting and stopping aircraft production lines is expensive.
CFM has so far kept engine production at a rate consistent with Boeing's previous output of 52 jets a month because the extra engines are being diverted to equip planes that had been left without engines at the Boeing plant due to earlier delays.
Safran Chief Executive Philppe Petitcolin said he expected this "recovery process" to be completed in May.
He did not say how CFM would respond after that, but industry sources say few decisions are expected until Boeing has at least a theoretical timetable for the ungrounding of the plane.
Finance director Bernard Delpit said Safran was seeing a "slight cash impact" from Boeing's delivery freeze because it gets paid a portion of its engine revenue from Boeing when the aircraft is delivered.
But he said this was being offset by strong cashflow in the rest of the group.
First-quarter sales included like-for-like growth of 13.3 percent in Aerosystems and Aircraft Interiors, which includes activities acquired through the purchase of Zodiac Aerospace last year. These count in Safran's earnings from March 2018.
Safran warned this rate of growth was "not fully representative" of the annual trend, even though its 'Seats' division resumed like-for-like growth in the first quarter.
The civil aftermarket grew 10.2 percent in dollar terms in the first quarter, Safran said. The company is targeting 2019 growth in the high single digits, or 7-9 percent.
($1 = 0.8982 euros) (Reporting by Tim Hepher; editing by Sudip Kar-Gupta and Jason Neely)