Airbus profits halve as jet deliveries slow

Airbus reported quarterly profits that halved from a year ago late Tuesday, as deliveries of its best-selling aircraft slowed.

First-quarter sales came in at 12.65 billion euros ($14.82 billion) while earnings per share (EPS) were 74 euro cents. Analysts polled by FactSet had expected sales of 12.58 billion euros and EPS of 44 euro cents.

On an adjusted basis, operating profit declined by 52% to 300 million euros, down from 624 million euros in the same period last year and far below FactSet expectations of 378 million euros.

Shares of Airbus rose 2% in morning trading on Wednesday.

Airbus had already disclosed that it delivered 114 commercial aircraft in the first quarter, versus 136 aircraft in the same quarter last year.

Airbus reiterated the guidance it issued in mid-February to deliver 870 commercial aircraft in 2026, fewer than the roughly 880 analysts had expected, citing engine shortages due to issues with one of its suppliers, Pratt & Whitney. The guidance doesn’t assume any additional disruptions to global trade, air traffic, or supply chain.

CEO Guillaume Faury told CNBC’s Charlotte Reed that negotiations with Pratt & Whitney on engine deliveries are ongoing, but those issues were not the driver for what he acknowledged was a “weak” first quarter. Administrative difficulties with deliveries to Chinese customers impacted the delivery of almost 20 aircraft, he said.

Faury also highlighted a record-high order backlog of more than 9,000 aircraft. “That’s a privilege to be in that leadership position, but it comes with obligations to deliver, and in the current economical and geopolitical environment, it remains a challenge,” he said.

Gross commercial aircraft orders totalled 408, up 46% from last year.

Airbus’ commercial aircraft unit sales fell 11% in the quarter compared to a year ago, while helicopters were unchanged and defence and space grew 7%. Total revenue declined by 7% in the quarter.

“In commercial aircraft, we continue to ramp up and produce as per our plan while navigating the shortage of Pratt & Whitney engines. In defence, the focus remains on serving global demand by ramping up production Across our portfolio of products and services,” Faury said in a statement.

Analysts say that investor sentiment around Airbus has turned markedly more sour since the start of the year, as its chief rival Boeing is getting back on track after a years-long crisis.

Airbus has enjoyed a strong momentum over the past few years as Boeing has been battling a crisis over design and production issues for its best-selling narrowbody plane, the 737 Max. 

Last week, Boeing reported a narrower-than-expected loss in the first quarter, as it saw improvements across its businesses, including its key commercial aircraft unit. Boeing is in the midst of a turnaround to return to profitability after a series of quality issues and a near-catastrophic blowout of a fuselage door plug in January 2024.

Like Airbus, Boeing has also struggled with supply crunches following the Covid-19 pandemic.

Airbus’ Faury told CNBC late Tuesday that it is not seeing an impact from the conflict in the Middle East and that customers are not asking for cancellations or postponements. With the current situation of a jet fuel shortage, airline customers will want to fly with more fuel-efficient aircraft, which could benefit Airbus, he added.

Boeing CEO Kelly Ortberg also said the company is not seeing a slowdown in aircraft orders since the war in the Middle East began in February.

“We see limited impacts Arising from the disruption around the Strait of Hormuz, though we may revisit this assumption if fuel prices remain high into Q3,” noted UBS analysts earlier this month.

“On the demand side we believe there is sufficient replacement demand that, even in a prolonged period of elevated fuel prices, Airbus is unlikely to see a demand shortfall.”

— CNBC’s Leslie Joseph contributed to this report