Airbus reported first-quarter earnings that beat analyst estimates as the aircraft manufacturer reduced costs on its A380 superjumbo, driving the biggest stock gain in more than five months.
Earnings before interest, tax and one-time items of €700 million exceeded an estimate of €658.7m from analysts surveyed by Bloomberg, while falling short of last year’s €734m. Airbus kept plans for “moderate return on sales growth” in 2014.
Airbus handed over a record 626 planes in 2013 and is aiming for a similar number this year. The Toulouse, France- based plane maker is on target to deliver its first A350 widebody model to customer Qatar Airways before yearend, and the A380 superjumbo programme is progressing toward a plan to break even in 2015, the company said on Tuesday.
“There are still many challenges ahead for the rest of the year,” chief executive Tom Enders said in a statement. “A strong focus remains on programme execution and the implementation of our various improvement and restructuring plans.”
Group sales gained 5 per cent to €12.6 billion in the quarter, with all three divisions – Airbus the plane maker, Airbus Helicopters, and Airbus Defence and Space – contributing. Earnings for last year were restated to reflect accounting changes.
Free cash flow before acquisitions improved to negative €2.03bn from the year-earlier negative €3.16bn, while the net cash position at March 31 was €6.5bn, compared with a year-earlier €8.5bn.
“The decline in first quarter earnings is less steep than predicted for both Ebit and for cash, which should reassure investors,” said Yan Derocles, an analyst at Oddo Securities in Paris.
Among the biggest challenges is getting the A350 long-range plane ready for service. Airbus, whose pilots have logged 1,600 flight hours with test models, will seek certification in the third quarter of this year. Research and development costs rose 18 per cent to €727m in the quarter as the plane maker strives to make improvements to meet service guarantees to customers.
Early production will see three batches of planes, the second coming around 2015, that include progressive improvements based on information gleaned from testing, chief financial officer Harald Wilhelm said on a call with journalists.
“We are very focused on the performance of the aircraft,” Mr Wilhelm said. “In what is quite normal, we’re seeing continuous improvements of the aircraft coming into service. What’s why we’re working in batches. By 2016, batch three will incorporate some weight savings.”
