Airbus profit falls 21% on A350 costs, slumping helicopter sales
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Toulouse: Airbus Group SE’s third-quarter profit fell 21% as helicopter sales declined and it spent money boosting production of the latest A350 wide-body model to make up for lost ground following earlier delays in the supply of seats and interiors.
Earnings before interest and tax excluding one-time items slumped to €731 million ($796 million) from €921 million a year earlier, Toulouse, France-based Airbus said in a statement on Wednesday. Analysts had forecast a figure of €735 million, the average of eight estimates.
Airbus maintained its guidance for full-year earnings matching 2015’s level as it increases spending to achieve the targeted 50 A350 deliveries this year, having handed over 26 in the first nine months. Chief executive officer Tom Enders is poised to announce a round of job cuts as the company prepares to scale back A380 superjumbo output and responds to lower helicopter sales.
“For the remaining months of the year we remain totally focused on deliveries to achieve our earnings and cash guidance,” Enders said in the release. Free cash flow excluding receipts from disposals and customer financing should also match last year’s figure, he said, reiterating previous guidance, and the overall delivery target of more than 650 aircraft remains within reach.
Airbus took a charge of €385 million against the A350 in the second quarter and needs to hand over 24 planes in the final three months to make good on its full-year goal, though the company has ranks of complete aircraft waiting in Toulouse to be fitted with interiors before being sent to customers. Handovers have been held up by a shortage of seats and lavatory cubicles from suppliers including Zodiac SA.
Problems involving Pratt & Whitney engines have also curbed deliveries of the Neo upgrade of the single-aisle A320, prompting Airbus to build more examples of the original plane. Key customer Qatar Airways Ltd. refused to take early Pratt-powered examples of the Neo because of cooling issues, and the turbines remain in short supply even after tweaks to fix the glitch.
The CFM International venture of General Electric Co. and Safran SA, is the alternate engine provider for the plane but only began shipments mid-year. Bloomberg