By Olivia Bugault

 

Airbus SE shares rose in early trading on Thursday after the European plane maker lifted its profitability, delivery and cash flow guidance for the year after a strong second-quarter performance. The company also announced it will launch a freighter variant of its A350 jet.

At 0744 GMT, Airbus trades 3.3% higher at EUR119.12.

Though a guidance upgrade was expected by analysts, the market is welcoming Airbus's new targets for the year that include the delivery of about 600 commercial aircraft compared with a previous target to at least match the 566 deliveries it achieved last year. Airbus also said it now expects adjusted earnings before interest and taxes in 2021 of about four billion euros ($4.74 billion), twice as much as it was expecting before. The company raised its 2021 free cash flow before mergers, acquisitions and customer financing view to EUR2 billion. This compares with a previous target of at least break-even.

"Although a strong quarter was expected and guidance was also expected to be raised, these results and guidance are well above market expectations," Citi says. Airbus's new adjusted EBIT guidance is EUR600 million above current consensus, the bank says.

The company's upgraded guidance comes on the back of a strong second quarter and first half. Net profit for the April-June period came in at EUR1.87 billion compared with a net loss of EUR1.44 billion a year earlier. Revenue rose 70% to EUR14.18 billion. Airbus's more closely watched adjusted EBIT also swung to a profit of EUR2.01 billion. The rise in revenues and profit was mainly driven by higher aircraft deliveries. In its first half, Airbus shipped more than 297 planes, up from 196 during the same period a year earlier.

Airbus said its board approved the launch of a freighter variant of its A350 wide-body as the company has been "quite absent" from this market segment which has been dominated by its U.S. rival Boeing Co., Chief Executive Guillaume Faury said during a call with journalists. Mr. Faury said the new freighter will enter into service in 2025. At present, Airbus has no commercial transaction to announce regarding its coming freighter, he said.

 

Write to Olivia Bugault at olivia.bugault@wsj.com

 

(END) Dow Jones Newswires

July 29, 2021 04:11 ET (08:11 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.
Airbus (EU:AIR)
Historical Stock Chart
From Aug 2021 to Sep 2021 Click Here for more Airbus Charts.
Airbus (EU:AIR)
Historical Stock Chart
From Sep 2020 to Sep 2021 Click Here for more Airbus Charts.