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Earnings at Airbus more than halved during the first three months of the year and came in below expectations as the European aerospace group’s newest jets were beset by production problems.
Adjusted earnings before interest and tax – which is meant to capture the performance of the underlying business by factoring out things like provisions, restructuring and acquisitions and disposals – tumbled 52 per cent to €240m in the March quarter compared to a year earlier. Analysts had predicted adjusted earnings of €326m.
The company noted that a fall for the commercial aircraft division’s adjusted Ebit mainly reflected “aircraft delivery mix, transition pricing and some higher ramp-up costs.” However, those ramp-ups have been made more difficult by issues at key suppliers, that ultimately slowed delivery of new aircraft, namely the A350 XWB and the A320neo.
Regarding its troublesome A400M military transport aircraft, which has been the subject of delays and technical problems, Airbus said “challenges remain on meeting contractual capabilities, securing sufficient export orders in time, cost reduction and commercial exposure, which could be significant.”
Group revenue, though, was up by 7 per cent to €13bn, while net profit jumped 52 per cent to €608m.
Tom Enders, chief executive, said the first quarter performance “doesn’t offer any big surprises” and said the company remained on track for its full-year earnings target. He added:
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!
Airbus’s order intake in the first quarter this year totalled €3.8bn, a little more than half what it was a year ago. The order book stood at €1.03tn, a €30bn decrease from last year.
The company expects to deliver mid-single-digit percentage growth in adjusted Ebit in 2017.