PARIS, March 5 (Reuters) - France's Thales on

Tuesday unveiled higher than expected sales, cash and profits

for 2023, pushing its shares sharply higher despite becoming the

latest aerospace player to feel pressure in the oversupplied

satellite business.

Operating profit rose by an underlying 11% to a record 2.13

billion euros ($2.31 billion) - topping 2 billion euros for the

first time since before the pandemic in 2019. Sales rose 8% to

18.43 billion euros, while the operating margin stood at 11.6%,

up 0.6 percentage points.

Analysts were on average expecting 2023 operating profit of

2.11 billion euros on sales of 18.18 billion, according to a

company-compiled consensus.

Shares in the supplier of civil and military radar and

digital identity systems as well as satellites, rose more than

7%. Thales said its order intake was fractionally higher than

the year before at 23.13 billion euros.

For 2024, Thales predicted like-for-like sales growth of 4%

to 6% to reach between 19.7 billion and 20.1 billion euros. It

predicted an operating margin of 11.7% to 12% and said new

orders would continue to outstrip revenues.

"Avionics continued to perform well, but Space remains

challenging," Bernstein analysts said.

The company said it would cut about 1,300 jobs at Thales

Alenia Space amid "structurally weaker demand" in commercial

telecoms, and that these workers would be redeployed within the

group. Some 1,000 of the affected jobs are in France.

CEO Patrice Caine said there would be no forced departures

as Thales tries to keep skills in-house.

The move comes as the market for large satellites in

geostationary orbit - once representing some 20 satellites a

year - now stands at around 10 a year, Caine said. Traditional

satellite firms face growing competition from the rapid growth

of constellations of small satellites.

"So the market has more or less been divided in half ... and

we have to re-adapt; there's no mystery," he told reporters.

The business affected by the changes represents about

one-third of Thales Alenia Space, equivalent to 700 million

euros in turnover, or 4% of the group's total, he said.

The shake-up comes weeks after Airbus, Europe's

other major producer of large satellites, unveiled a fresh

charge for its troubled space business.

Caine played down suggestions that Thales could buy all or

parts of BDS, the cybersecurity branch of ailing French IT

company Atos that Airbus has offered to buy for 1.5 billion to

1.8 billion euros, but stopped short of ruling anything out.

Atos was thrown into new uncertainty last month after talks

with Czech billionaire Daniel Kretinsky over the sale of another

part of the business - that would have provided urgently needed

cash - collapsed.

"Our position has been unchanged for months and months",

Caine said, adding that Thales had already made other

acquisitions in the cybersecurity sphere including that of

Imperva. "We are concentrating on those subjects, so no change".

($1 = 0.9216 euros)