LONDON – Airbus SE (AIR.FR) said Thursday that second-quarter profit fell 34%, hampered by lower aircraft deliveries and that it further cut production plans for its flagship A380 superjumbo amid slack demand.
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Net income fell to 895 million euros ($1.1 billion) from EUR1.36 billion the year prior, the Toulouse, France-based company said. Sales fell 5% to EUR15.7 billion.
Airbus has had difficulty getting its popular A320neo single-aisle planes out the door amid continued engine-delivery problems from United Technologies Corp.(UTX). Qatar Airways (QAIR.YY) has walked away from some A320neo orders and four A350 long-range jets because of delays.
"We are facing challenges due to ongoing engine issues, but we have a clear road map in place and have maintained our full-year guidance," Airbus Chief Executive Officer Tom Enders said. He added that meeting full-year targets of delivering about 720 planes is dependent on engine supply.
Airbus stuck to full-year guidance, including free cash flow, before deals and customer financing, roughly equal to last year's EUR1.4 billion. The plane maker had about EUR2 billion in cash outflow in the first six months of 2017.
However, the company also faces weak demand for some big planes. United Continental Holdings Inc. (UAL) said this month that it would delay taking some of Airbus's A350 planes. In May, Delta Air Lines Inc. (DAL) put off taking some of those twin-engine long-range jets.
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Lack of demand for the biggest planes has hit the Airbus A380 superjumbo particularly hard. The company said it would cut output to eight aircraft in 2019. It curtailed production plans last year for the planes but hasn't won more orders. At that production rate, Airbus loses money on each A380 it builds.
Airline customers have shied away from the A380 and Boeing's 747-8 jumbo jet, worried about filling the big planes. Boeing has signaled it might cease producing the iconic 747.
On Thursday, the European aircraft maker couldn't match Boeing Co. (BA), which had reported strong second-quarter results on Wednesday, including $4.5 billion in free cash flow, propelling its stock 9.9% on the day to close at a record $233.45.
(END) Dow Jones Newswires
July 27, 2017 01:54 ET (05:54 GMT)