(Corrects spelling from "had" to "has", paragraph 12)
* Defence firm made EBIT loss of 100 million euros in 2010
* Hit by charges, provisions of more than 700 million euros
* Chief exec blames predecessors for company problems
* Shares up 5.4 percent
(Adds 2011 cashflow comment, updates shares)
By Cyril Altmeyer
PARIS, Feb 14 (Reuters) - Investors shrugged off a profit warning from French defence company Thales as its chief executive lashed out at previous management for handing him a legacy of flawed contracts and cost overruns.
Europe's largest defence electronics company said it would post an operating loss close to 100 million euros ($135 million) for 2010 after higher-than-expected charges linked to problems in making Thales's share of the Airbus A400M military plane.
"We now see light at the end of the tunnel regarding this difficult contract portfolio inherited from the past," Chief Executive Luc Vigneron told a news conference on Monday.
Thales makes radars for the French Rafale and Mirage jet fighters, military and commercial satellites and equipment for civil passenger jets, and railway signalling equipment.
Monday's warning, issued 10 days before the group's results, put an end to speculation about extra charges, which had weighed on the company's shares.
After a weak start, Thales shares bounced up 5.4 percent to 27.75 euros by late session, against a flat wider market.
"They had the choice -- either put it (the bad news on charges) on 2010 or spread it over 2011," said Christophe Menard, analyst at Kepler Securities.
"They chose the first option, which is relatively neutral from a share price point of view, even if the level of charges and provisions seem to me to be excessively high."
Thales said it would book charges and provisions totalling 700 million euros for 2010, while analysts had expected something closer to 100-150 million.
Amid a spate of negative press reports and staff criticism, Vigneron has been struggling to impose his authority on the company he has led since Dassault Aviation became its largest industrial shareholder in 2009.
French newspaper La Tribune reported last week that France's highest defence policymaking body, chaired by President Nicolas Sarkozy, had discussed a possible ouster of Vigneron on Jan. 31.
France's defence minister declined to comment on the report.
ANGERED
Vigneron denounced a "campaign of destabilisation" against Thales, which has been at the centre of political and industrial machinations since well before it was privatised in 1999.
"These rumours have nothing to do with the reality of the company as I see it," a visibly angry Vigneron told reporters.
Vigneron said he believed speculation about his future came from unnamed former Thales staff who were "trying to distract attention from the nice little legacy they left behind them".
Excess costs relating to contracts prior to 2009 reached 1.2 billion euros, spread over 2009 and 2010, Thales said. The company believes the contracts were poorly negotiated.
Thales has clashed with Airbus over problems with the central electronic system for the A400M, which is itself badly behind schedule and over budget.
European nations are finalising a 3.5 billion euro bailout for the plane, and Airbus parent EADS is under pressure to share some of this with suppliers.
Thales also faces problems with its Meltem maritime patrol aircraft contract in Turkey, a ticketing contract in Denmark and its Lorads III air traffic management contract in Singapore.
Thales said it expected 2010 revenue to rise 2 percent to 13.1 billion euros.
But its warning of a profit loss contrasted with Thales's most recent target of a positive operating margin of 3-4 percent for 2010, up from 1.2 percent in 2009 when it posted operating profit of 151 million euros.
Thales said it was aiming for an operating margin of 5 percent in 2011, rising to 6 percent in 2012. It said revenue should "grow slightly", led by aerospace and transport, and its order intake should be "more or less in line with revenues".
However, Vigneron said 2011 would be a difficult year for cash generation and would see some restructuring charges.
($1 = 0.7381 euro)
(Writing by Astrid Wendlandt and Tim Hepher; Editing by Hans Peters, Will Waterman and David Hulmes)