Airbus profits swoop 52 per cent lower as it battles technical turbulence but says it will hit targets for the year

 
Rebecca Smith
Airbus said engine troubles have caused delivery delays on one of its jets
Airbus said engine troubles have caused delivery delays on one of its jets (Source: Getty)

Airbus' underlying earnings dropped 52 per cent in the first quarter, though the aerospace giant's boss said the company was confident it will hit its performance targets this year.

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The figures

Airbus posted quarterly figures showing a 52 per cent fall in adjusted earnings before interest and tax to €240m (£203m), compared to €498m for the same period in 2016.

Revenues rose seven per cent to €13bn from €12.2bn for the first quarter of 2016, with revenue for commercial aircraft rising 13 per cent and deliveries of 136 aircraft, including a higher proportion of A350 XWBs. Helicopters' revenues increased by 11 per cent with deliveries of 78 units.

Order intake was €3.8bn up from €7.2bn for the same period last year, with the order book valued at €1.03bn as of 31 March.

Why it's interesting

The company has been ramping up production of new aircraft and cutting the prices of old passenger jets, as competition heats up with fierce rival Boeing to increase production of passenger jets after both accrued record order backlogs.

The two firms are making several new variants of aircraft at the same time, meaning a risk of production issues.

Airbus has a few headaches at present, with production delays on its twin-aisle A350, while its A320 Neo short-haul jet has also faced troubles with the Pratt & Whitney engine. Airbus said the ramp-up will be "back-loaded this year to reflect the necessary time for the implementation of product improvements".

Problems with its A400M military aircraft programme are ongoing, with Airbus saying "challenges remain" on meeting contractual capabilities, securing sufficient export orders in time, cost reduction and commercial exposure.

What the company said

Airbus chief executive Tom Enders said: Our first quarter performance doesn’t offer any big surprises: we are on track for our full year EBIT [earnings before interest and tax] and free cash flow objectives and we took a nice uptick in cash proceeds from the sale of Defence Electronics.

New order activity was low in Q1 as predicted but let’s not forget that our strong order book of over 6,700 commercial aircraft supports our ongoing production ramp-up. Programme execution remains key for all our businesses!

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