Airbus Shares Plunge 11% Amid 2024 Guidance Cuts

Airbus shares dropped nearly 11% on Tuesday following the company's announcement of lowered targets for 2024, including aircraft deliveries and earnings projections. On Monday, Airbus revised its adjusted earnings before interest and taxes (EBIT) forecast to approximately €5.5 billion ($5.9 billion), down from the previously estimated range of €6.5 billion to €7 billion stated on April 25.

The company now anticipates delivering around 770 commercial aircraft this year, a decrease from its earlier expectation of nearly 800. Additionally, Airbus has postponed the timeline for increasing production of its A320 aircraft.

The reduced guidance is partly attributed to ongoing supply chain issues within the company's commercial aircraft segment. Persistent challenges in obtaining engines, aerostructures, and cabin equipment have significantly impacted Airbus’s production capabilities.

The company is also encountering additional expenses in its space systems division, recognizing commercial and technical difficulties that have led to approximately €0.9 billion in charges in the first half of 2024. These charges are related to revised assumptions concerning schedules, workload, sourcing, risks, and costs over the lifecycle of certain telecommunications, navigation, and observation programs.

What Does This Mean For Me?

Earlier this year, Airbus reported weaker-than-expected operating profit for the first quarter. CFO Thomas Toepfer said that the company's earnings were not particularly robust. Airbus’s revised outlook and associated challenges underscore the wider difficulties faced by the aerospace sector amid ongoing supply chain disruptions. The company’s half-year results, scheduled for release on July 30, will provide further insights into its financial health in response to these challenges.