Yahoo Finance Airbus slumps after planemaker cuts delivery outlook and books steep Space charge
Investing.com -- Shares in Airbus (EPA:AIR) shed over a tenth of their value in early European trading on Tuesday after the planemaking giant slashed its forecast for jet deliveries and booked a provision charge of almost one billion euros at its space business in the first half of its current fiscal year.
In a statement on Monday, the group said that it now expects to deliver around 770 commercial aircraft in 2024, down from its initial outlook of around 800. Compared to the prior year, the figure would imply a slowdown in growth to 5% from 9%.
It added that it now does not expect to reach a record pace of 75 deliveries per month of its popular A320neo model until 2027. Airbus had first pencilled in hitting that rate in 2026. At the moment, it churns out an estimated 50 jets a month, according to Reuters.
The company said it was facing "persistent specific supply chain issues mainly in engines, aerostructures and cabin equipment." Airbus, like other firms in the aerospace sector, has been grappling with supply shortages after the COVID-19 pandemic dented the balance sheets of many parts suppliers.
"The comments on the supply chain are not unexpected, but remain a frustration for investors," analysts at RBC Capital Markets said in a note to clients.
Following the revision to its deliveries expectations, Airbus cut its projections for full-year underlying operating income to 5.5 billion euros versus a prior range of 6.5 billion euros to 7.0 billion euros. Free cashflow is also now seen at 3.5 billion euros rather than 4.0 billion euros.
Meanwhile, Airbus said the management team at its Space Systems division had identified "commercial and technical challenges" during an internal review, leading to a 900 million euro charge. Analysts at Stifel called the charge "disappointing," but noted that the company pushed back against the notion that the unit was a "cash sinkhole."
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