Airbus Raises 2021 Cash Flow, Earnings Guidance Despite Third-Quarter Sales Drop -- Update

   By Olivia Bugault

Airbus SE has raised its free cash flow and earnings guidance for the year again despite booking lower sales in its third quarter as it delivered fewer commercial planes.

At 0733 GMT, Airbus shares were up 2.9% at EUR113.18.

The European plane maker said Thursday that it is now expecting adjusted earnings before interest and taxes at around 4.5 billion euros ($5.22 billion) for the year. It targets free cash flow before mergers and acquisitions and customer financing at roughly EUR2.5 billion.

Airbus previously raised its outlook in July, when it guided for adjusted EBIT of EUR4 billion and free cash flow of EUR2 billion.

The company on Thursday maintained its target of 600 commercial jet deliveries for the year. Over the first nine months of 2021, Airbus has delivered 424 aircraft.

The updated outlook comes as Airbus posted net profit of EUR404 million in the quarter, which compared with a net loss of EUR767 million in the same period a year earlier. Revenue fell 6% to EUR10.52 billion on the back of lower plane deliveries. Airbus delivered 127 commercial aircraft in its third quarter, 18 fewer than during the same period last year.

Airbus's more closely watched adjusted earnings before interest and taxes fell 19% to EUR666 million, it said. Though lower than a year ago, it is 7% above market expectations, Citi said.

Airbus reported free cash flow before mergers and acquisitions and customer financing of EUR2.26 billion over nine months.

The company also updated its production ramp-up plans after announcing in May that it was targeting a monthly production rate of its A320 jet family at 45 in the fourth quarter of 2021 and 64 by the second quarter of 2023. Airbus is now working to step up production to 65 per month by summer 2023 for its A320 family, while keeping its short-term goal unchanged, it said.

Demand supports Airbus's planned output ramp-up, its Chief Executive Officer Guillaume Faury said during a call with journalists. Mr. Faury added that the company is still studying a potential increase to up to 75 A320 family jets produced per month, that it previously said could happen by 2025, and that that is also supported by demand.

Regarding the production rate of its widebody jets, Airbus said that "the recent commercial successes of the A330 program enable a monthly rate increase from around 2 to almost 3 aircraft at the end of 2022." It stuck to its plan to increase the output of its A350 wide-body jets to 6 a month from 5, though it should now happen in early 2023 and not by the autumn of 2022 as previously said.

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

(END) Dow Jones Newswires

October 28, 2021 04:03 ET (08:03 GMT)

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