Airbus shares fell this morning as it reported plunging profits after cancelling production of its A380 superjumbo jet.
But the firm’s underlying earnings and revenue gained height as it looked to capitalise on arch-rival Boeing’s grounded 737 Max fleet by ramping up manufacturing of its equivalent narrow body A320 plane.
The French aerospace and defence giant made a net profit of just €40m (£34.6m) in the first three months of the year, down 86 per cent year-on-year on €283m in the same period of 2018. Consolidated earnings per share were €0.05, compared to €0.37 in the same period last year.
Revenues increased significantly, however, to €12.5bn, up on €10.1bn last year, mainly reflecting increased deliveries of commercial aircraft as the production ramp-up continued.
The firm said it was €4.4bn in the red, up on €3.65bn this time last year, as it dug deep to build the extra planes. Shares fell 0.3 per cent in early trading.
Why it’s interesting
Airbus has moved fast to cash in on US rival Boeing’s turmoil, which has stemmed from the grounding of its flagship 737 Max jet across the globe, following the second of two recent fatal crashes in early March. The French firm delivered 162 commercial aircraft in the quarter, 25 per cent more than this time last year, as it cranked up the pressure on Boeing.
But this has come just as it faces its own significant headwinds, stemming largely from the “prolonged suspension of defence export licences to Saudi Arabia by the German government”, which cost Airbus €190m in the quarter.
Until the second 737 Max went down in Ethiopia in early March killing 157 people, it looked like Airbus would suffer the weaker first quarter of the two world’s biggest plane makers, after it was forced to abandon production of its A380 model, the largest commercial aircraft ever made.
New chief executive Guillaume Faury stepped in at the end of last month to replace Tom Enders, amid a wider management overhaul, and he forecast 880 to 890 commercial aircraft deliveries in 2019, up on last year’s company record of 800.
What Airbus said
New chief executive Guillaume Faury said: “The first quarter underlying financials mainly reflect our commercial aircraft ramp-up and delivery phasing.”
“The commercial aircraft market remains robust and we continue to see good prospects in the helicopters and defence and space businesses. The new management team is in place and focused on delivering on our commitments.”