Airbus beats forecasts despite facing turbulent times with a fresh charge to its military aircraft programme
European aerospace group Airbus beat analyst expectations despite revealing its earnings took a huge hit thanks to its embattled A400M military aircraft programme.
The figures
France-based Airbus booked a fresh €1.2bn (£1bn) charge on its A400M programme, bringing the total for last year to €2.2bn – and the total since the project was launched more than a decade ago now sits at €6bn due to delays and cost overruns.
Adjusted operating income fell four per cent to €3.96bn while revenues rose three per cent to €66.58bn Analysts expected full-year operating earnings before one-offs to fall 7.3 per cent to €3.83bn, but a 0.7 per cent increase in sales, to €64.92bn.
The group expects more than 700 jetliner deliveries in 2017, up from 688 in 2016.
Shares in the firm were down 1.84 per cent in morning trading.
Why it's interesting
The European plane giant has struggled with its troubled A400M programme, which has been set back by repeated industrial issues, including a recent discovery of problems in an engine gearbox. Airbus has also downgraded sales expectations as the aircraft so far has only one buyer.
Despite its higher-than expected earnings, Airbus also called for new talks with customer nations to limit further losses after it received a €3.5bn bailout in 2010.
Chief executive Tom Enders said the progress made in 2016 creates the firm the building blocks to achieve its earnings and cash flow growth potential.
In September, the France-based firm announced a corporate shake-up to merge divisions, simplify brands and remove bureaucracy. It's expected to cut 1,000 headquarters jobs.
What Airbus said
Enders said:
“We have delivered on the commitments that we gave a year ago and achieved our guidance and objectives, with one exception, the A400M, where we had to take another significant charge totaling €2.2 billion euros in 2016. De-risking the programme and strengthening programme execution are our top priorities for this aircraft in 2017.
"We recorded a net book-to-bill above one in a year we delivered more commercial aircraft than ever before. The record order backlog is supporting the rampup plans and our performance in 2016 shows we can deliver on that.
"Our commercial performance in helicopters was good despite a difficult market environment and we continued to strengthen and reshape the defence and space portfolio. We are taking additional steps to increase efficiency through the integration project, while investments in digital transformation will further improve our competitiveness."