ROME, Oct 15 (Reuters) - Shares in Leonardo rose
as much as 3% in early trade on Friday a day after falling when
Boeing said parts supplied by the Italian defence group
sourced from a sub-contractor had been improperly manufactured.
Leonardo fell more than 7% on Thursday.
The state-controlled conglomerate said the sub-contractor,
Italy's Manufacturing Processes Specification (MPS), was among
sub-suppliers qualified by Boeing.
"The sub-supplier is under scrutiny by prosecutors therefore
Leonardo is an injured party and will not bear any potential
costs associated with this issue," Leonardo said on Thursday.
It said MPS was no longer one of its suppliers.
MPS has worked for a broad set of aerospace companies
including Spirit AeroSystems, according to industry
sources and documents.
It is also an approved supplier to Airbus,
according to a list available via the planemaker's website.
"The reaction of the shares already prices in the potential
risk of non-recurring expenses, but the reputational problem for
(Leonardo's) Aerostructures division remains," broker Equita
The division is already suffering from a fall in demand and
is expected to burn through cash this year as some of plants
operate below capacity.
Shares in Leonardo were up 1.1% at 0833 GMT, outpacing a
0.6% rise in Italy's blue-chip index FTSE MIB.
(Reporting by Francesca Landini and Giulia Segreti; editing by