Airbus earnings jump on higher output of rival to Boeing Max
Airbus earnings surged in the first quarter as the European planemaker churned out higher numbers of the A320 narrow-body jet that's the biggest global rival to Boeing's grounded 737 Max.
The company delivered 162 aircraft, including 126 A320s, a model that appears to have overcome a run of engine manufacturing faults just as the 737 faces questions about its future after two fatal crashes in five months.
Adjusted earnings before interest and tax jumped almost 40-fold to €549 million from €14 million a year earlier, according to a statement Tuesday, providing a solid starting point for chief executive officer Guillaume Faury, who took over from long-time head Tom Enders on 10 April.
While some 737 Max operators have indicated that they'll consider a switch to Airbus's latest A320neo, the Toulouse, France-based company has said it isn't banking a flurry of new orders, partly because its narrow-body production capacity is sold out over the next few years.
Still, Faury said the commercial aircraft market is "robust" and that the company is on track to hand over between 880 to 890 jetliners in 2019.
With the issues concerning Pratt & Whitney engines for the A320neo seemingly resolved, deliveries of the plane are set to "dominate", Jefferies analyst Sandy Morris wrote in a note. That should outweigh any negativity surrounding the early termination of the A380 superjumbo programme, which contributed to a 58-plane reduction in the order backlog in the quarter, he said.
Airbus is still facing problems ramping up deliveries of the A321, its biggest narrow-body, amid issues with the highly customised cabin. It also handed over just three A330neo wide-bodies after turbine supplier Rolls-Royce Holdings was hit with production delays.
The company said talks are progressing on amended contracts for the A400M military transport plane, but reported no new charges against a project that's been a drain on cash for years. That allowed it to reiterate a forecast for a 15% gain in adjusted full-year EBIT.
Airbus shares have surged 46% this year, outstripping Boeing, where gains have been limited to 18% as it battles to return the Max to service. The European manufacturer closed at €123.02 in Paris on Monday, giving a market value of €95 billion.