Profits fall as jet deliveries slow
File: Visitors pass an Airbus SAS A320 aircraft during the second day of the Farnborough International Air Show on Tuesday, July 10, 2012 in Farnborough, England.
Matthew Lloyd | Bloomberg | Getty Images
Airbus reported quarterly profit late Tuesday that halved from a year ago as deliveries of its best-selling planes slowed.
First quarter sales were 12.65 billion euros ($14.82 billion), while earnings per share (EPS) was 74 euro cents. Analysts surveyed by FactSet expected sales of 12.58 billion euros and EPS of 44 euro cents.
On an adjusted basis, operating profit fell 52% to 300 million euros from 624 million euros in the same period last year, well below FactSet’s expectations of 378 million euros.
Airbus has already announced that it delivered 114 commercial aircraft in the first quarter, while it delivered 136 aircraft in the same quarter last year.
Airbus reiterated guidance it issued in mid-February to deliver 870 commercial aircraft in 2026, citing engine shortages caused by problems at one of its suppliers, Pratt & Whitney; That figure was less than about 880 analysts expected. The guidance does not assume that there will be any additional disruption to global trade, air traffic or supply chains.
CEO Guillaume Faury said the company was closely monitoring the possible effects of the conflict in the Middle East, without providing further details.
Faury said, “In commercial aircraft, we continue production in accordance with our plan while eliminating the shortage of Pratt & Whitney engines. In defense, we focus on meeting global demand by increasing production in our product and service portfolio.”
While Airbus’ commercial aircraft sales fell 11% in the quarter compared to the previous year, helicopters remained unchanged, while defense and space increased by 7%. Total revenue decreased 7% in the quarter.
Gross commercial aircraft orders reached 408, up 46% from last year.
Airbus sentiment cools as Boeing gains strength
Analysts say investor sentiment towards Airbus as its chief rival has become noticeably worse since the beginning of the year. Boeing’s It is getting back on track after years of crisis.
While Boeing has been struggling with a crisis due to design and production problems for its best-selling narrow-body aircraft, the 737 Max, Airbus has enjoyed strong momentum over the past few years.
Last week, Boeing reported a smaller-than-expected first-quarter loss as it saw improvements in its business lines, including its main commercial aircraft unit. Boeing is in the midst of a turnaround to return to profitability after a series of quality issues and the near-catastrophic explosion of a fuselage door spigot in January 2024.
Like Airbus, Boeing has struggled with supply crunches in the wake of the Covid-19 pandemic.
Boeing CEO Kelly Ortberg said the company has not seen a slowdown in aircraft orders since the war in the Middle East began in February.
“We view impacts from disruption around the Strait of Hormuz as limited, but we may reconsider this assumption if fuel prices remain elevated in the third quarter,” UBS analysts said earlier this month.
“On the demand side, we believe there is sufficient replacement demand that Airbus is unlikely to see a demand shortfall, even during a period of prolonged high fuel prices.”
— CNBC’s Leslie Joseph contributed to this report
