Airbus profit nosedives after production troubles and choppy helicopter sales
Supplier headaches and a turbulent switch to newer models have taken a toll on Airbus Group's third quarter profit, which slumped 21 per cent.
The figures
Airbus may have been celebrating the delivery of its 10,000th aircraft last week (an A350-900 for Singapore Airlines, in case you were wondering), but it had less to enjoy today, posting lower than expected third quarter profits.
The aerospace group said earnings before interest and tax excluding one-time items fell 21 per cent to €731 million (£654m), while revenues dropped one per cent to €13.95bn.
The profits of its commercial jets unit slumped 26 per cent despite four per cent higher revenues, which Airbus said stemmed from difficulties in the supply chain for its A350 and A320neo jets.
The aircraft maker has been shelling out on addressing production delays to its latest wide-body plane, and also fell behind on single-aisle deliveries and witnessed a drop in helicopter sales. Helicopter profits fell 29 per cent.
It has maintained its guidance for full-year earnings matching 2015’s level. Airbus needs to supply 24 jets in the final three months of the year to achieve its full-year delivery goal of 50 aircraft.
Shares in the group have fallen 14 per cent this year.
Why it’s interesting
Airbus commercial aircraft chief Fabrice Bregier recently made the bold claim that his company would overtake Boeing in terms of annual deliveries by 2020, so all eyes are on the firm's progress.
Airbus noted its results were hindered somewhat by the transition to new models and revamped versions of current ones. It wanted to make a smooth switch to a new model of A320, but was troubled by delayed deliveries of engines from Pratt & Whitney.
The French-based company has had a turbulent year. In September, it announced a corporate shake-up and chief executive Tom Enders is expected to announce a round of job cuts.
What Airbus said
Airbus' chief executive Tom Enders said:
As expected, the nine-month performance reflects the heavily back-loaded aircraft delivery schedule, ongoing production ramp-up and transition to new versions of our A320 and A300 aircraft.
For the remaining months of the year we remain totally focused on deliveries to achieve our earnings and cash guidance.
The commercial environment continues to be rather healthy, with a backlog of more than 6,700 aircraft supporting our production plans and reflecting the strength of the product portfolio. Further integration of the group, as recently decided, will simplify the company’s governance and improve competitiveness.