Key Takeaways:
Airbus SE reported a 52 percent drop in first-quarter adjusted operating profit, as the European planemaker grapples with persistent engine shortages from partner Pratt & Whitney that have curtailed aircraft deliveries.
"The operating environment remains dynamic and complex," Chief Executive Guillaume Faury said in an earnings call. "We are closely monitoring the potential impact from the fast-changing situation in the Middle East. In commercial aircraft, we continue to ramp up and produce as per our plan while navigating the shortage of Pratt & Whitney engines."
The company's results showed a significant miss on profitability even as revenue slightly topped forecasts. Airbus delivered 114 planes in the first quarter, a fraction of its annual target.
Shares in Airbus have fallen more than 16 percent this year as supply-chain problems prevent it from fully capitalizing on the production woes at its main rival, Boeing Co. The U.S. planemaker delivered 143 commercial aircraft in its first quarter, and its stock has gained over five percent since January.
Airbus confirmed in February it was taking action to enforce its contractual rights against Pratt & Whitney's parent company, RTX Corp., for failing to supply the number of engines the planemaker had ordered. Faury noted Tuesday that the situation has not significantly improved, creating an ongoing headache for production of its best-selling A320-family jets.
Despite the engine shortfall, Airbus held firm on its 2026 targets, forecasting it will ship about 870 commercial aircraft to customers. The company also maintained its guidance for an adjusted EBIT of around 7.5 billion euros and free cash flow of approximately 4.5 billion euros for the full year. Production targets for its various models, including 70 to 75 A320s per month by the end of 2027, were also unchanged.
The maintained guidance suggests management is confident it can resolve the supply chain bottlenecks in the latter half of the year. Investors will watch the company's second-quarter results closely for any improvement in the engine supply from Pratt & Whitney and progress toward its delivery goals.
This article is for informational purposes only and does not constitute investment advice.
