Airbus shares soar as investors prioritise strong profit and order pipeline above a €1.3bn charge

 
Lucy White
FRANCE-TRANSPORT-AVIATION-AIRSHOW-A400M
Airbus suffered a €1.3bn charge relating to the A400M military aircraft (Source: Getty)

France-headquartered aeroplane manufacturer Airbus has seen its share price take off this morning, as it revealed full-year results for 2017 which beat guidance across the board.

The figures

Airbus's order intake increased from €134bn in 2016 to €158bn (£140bn) last year. A total of 1,109 net commercial aircraft orders were received, compared to 2016's 731.

Net helicopter orders totalled 335 units, down slightly from 353 units, and included 48 Super Pumas which are used by military worldwide and 17 H175s often used by oilfield operators.

Revenues were stable at €66.8bn – commercial aircraft revenues rose, while helicopter revenues were slightly down. Although the defence and space division had its boundaries changed, on a comparable basis revenues were seven per cent higher.

Adjusted earnings, which exclude one-off impacts, increased from €3.96bn to €4.25bn.

Read more: Airbus misses out while Boeing strikes a deal in a bumper weekend of deals at the Dubai Airshow

Why it's interesting

Investors were seemingly impressed with Airbus's results, as its share price shot up more than 11 per cent. This came despite a €1.3bn charge relating to the A400M military aircraft, after the firm agreed a "re-baselining with government customers" after the programme suffered delays in deliveries.

The company also suffered a €117m hit from compliance issues, and a net loss of €20m related to mergers and acquisitions.

But these were somewhat balanced by a €604m net capital gain from the sale of the defence electronics business.

"There is no ignoring the scale of problems that Airbus senior management have needed to face up to this past year and that have included historic corruption allegations in relation to Airbus military, satellite and civil airplane operations [and] ongoing Pratt & Whitney PW1100G engine delivery problems on the A320neo," said defence and aerospace analyst Howard Wheeldon.

Read more: UK aerospace gets £9bn boost thanks to bumper Airbus, Bombardier and Boeing deals at Dubai Airshow

What Airbus said

“Despite persistent engine issues on the A320neo, we continued the production ramp-up and finally delivered a record number of aircraft. On A400M, we made progress on the industrial and capabilities front and agreed a re-baselining with government customers which will significantly reduce the remaining programme risks," said chief executive Tom Enders.

"Overall, the strength of our 2017 achievements is reflected in our dividend proposal which is up 11 percent against last year. This also endorses our earnings and cash growth story for the future.”

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