Airbus SE gave a guarded outlook for its two troubled plane projects, taking the shine off a record level of jetliner deliveries.
The European manufacturer booked a 1.3 billion euro ($1.6 billion) charge against the A400M military transport model, and said meeting 2018 earnings targets will be dependent on overcoming engine issues afflicting its latest A320neo single-aisle jet.
Airbus is struggling to put out fires as a time when it should be enjoying the benefits of a surge in commercial aircraft sales that will see it hand over about 800 planes this year. Chief Executive Officer Tom Enders said the Toulouse, France-based company is working on measures to gain control over both problem programs.
“The A320neo ramp-up remains challenging and requires that the engine suppliers deliver in line with commitments,” he said in a statement, adding that impact on deliveries of the latest turbine glitch is under assessment. The A400M charge is aimed at mitigating future risk, adding to more than 7 billion euros in cost overruns since the program began in 2003.
Earnings before interest and tax before one-time items increased 8 percent in 2017 to 4.25 billion euros, the planemaker said. Analysts had predicted a profit of 3.99 billion euros, the average of 13 estimates. This year’s figure should gain 20 percent, so long as delivery targets are met, it said.
Airbus last week reached an outline deal with the A400M’s seven customer nations to reset the military airlifter project after years of cost overruns and performance setbacks.
At the same time, Airbus has been blindsided by yet another flaw with the Pratt & Whitney engines that power its best-selling A320neo jet. The latest issue, which emerged last week after Enders suggested Airbus had finally moved on from two years of glitches, relates to a seal that Pratt replaced after the an earlier version exhibited durability issues.
The planemaker also faces the distraction of a series of international bribery probes concerning the use of payments and middlemen in its marketing campaigns. It last week reached a 99 million-euro deal to settle a corruption investigation by German prosecutors into the sale of Eurofighter warplanes to the Austrian military.
- 2017 revenue up 0.3% to EU66.8b
- Adjusted EBIT up 8% to EU4.25b
- Annual dividend EU1.50/share, up 11%
- A400M charge EU1.3 billion
- 2018 adjusted EBIT forecast to rise 20% if engine makers meet commitments