Airbus Stock Drops 11% Following Reduction in 2024 Targets and Deliveries

Airbus Stock Fall 11% Due to Revised 2024 Goals and Reduced Deliveries

Crypto News- Shares in Airbus dropped by nearly 11% on Tuesday after the company announced significant cuts to its 2024 targets, including aircraft deliveries and earnings projections. On Monday, Airbus revised its expected adjusted earnings before interest and taxes to approximately 5.5 billion euros ($5.9 billion), down from the previous estimate of 6.5 to 7 billion euros set on April 25.

Lower Delivery Expectations

Airbus also adjusted its delivery forecast, now anticipating around 770 commercial aircraft deliveries this year, compared to the earlier outlook of nearly 800. Additionally, the company pushed back its timeline for ramping up production of its A320 aircraft.

By 11:37 a.m. London time, Airbus’ Europe-listed shares had fallen 10.85%. The company attributed the guidance cuts to ongoing supply chain challenges in its commercial aircraft division.

Persistent Supply Chain Issues

“Airbus is facing persistent specific supply chain issues mainly in engines, aerostructures, and cabin equipment,” the company stated. These disruptions have significantly impacted its ability to meet previous targets.

Additional Costs in Space Systems

Moreover, Airbus is dealing with increased costs in its space systems division. The company acknowledged “commercial and technical challenges” in this area, leading to charges of around 0.9 billion euros in the first half of 2024. These charges are primarily related to updated assumptions on schedules, workload, sourcing, risks, and costs associated with various telecommunications, navigation, and observation programs.

Looking Ahead

Airbus plans to release its half-year results on July 30. This upcoming report will provide a comprehensive overview of the company’s financial performance and operational developments for the first half of the year. Earlier in 2024, Airbus faced financial challenges, reporting weaker-than-expected operating profit for the first quarter. This underperformance was partly attributed to ongoing supply chain issues and other operational disruptions that have affected production schedules and cost structures.

At the time of the first-quarter report, Airbus’ Chief Financial Officer, Thomas Toepfer, discussed these challenges in an interview with CNBC. He noted that the company’s earnings were “not particularly strong,” highlighting the impact of external pressures on Airbus’ financial results. Toepfer pointed out that specific supply chain bottlenecks, especially in the areas of engines, aerostructures, and cabin equipment, had contributed significantly to the weaker financial outcomes. Additionally, the company faced higher costs and operational inefficiencies, which further weighed on its profitability.

The forthcoming half-year results will be closely watched by investors and analysts, as they seek to understand how Airbus is managing these ongoing issues and what steps the company is taking to stabilize and improve its financial performance for the remainder of the year. The results will also provide insights into how Airbus is addressing the broader challenges facing the aerospace industry, including supply chain disruptions, fluctuating demand, and competitive pressures.

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