Airbus Shares Plunge Nearly 11% After Company Revises 2024 Earnings and Delivery Targets
Aerospace giant Airbus announced on Tuesday that it has revised its 2024 targets, causing a nearly 11% drop in the company’s shares. Airbus lowered its adjusted earnings before interest and taxes (EBIT) from the previous estimate of 6.5 billion euros to 5.5 billion euros ($5.9 billion).
Reduced Aircraft Delivery Estimate
Airbus also revised down its aircraft delivery forecast for 2024. The company now expects to deliver approximately 770 commercial aircraft this year, down from the previous estimate of around 800. Additionally, the timeline for ramping up production of the A320 aircraft has been delayed.
Cited Supply Chain Issues
One of the main reasons for the downward revisions is ongoing supply chain challenges. Airbus acknowledged that issues with engines, airframes, and cabin equipment in its commercial aircraft business continue to persist. These bottlenecks are impacting the company’s ability to meet production targets and maintain cost efficiency.
Additional Costs in Space Systems Division
Beyond the commercial aircraft sector, Airbus is also facing increased costs in its space systems division. The company noted that “commercial and technical challenges” in this segment have led to approximately 0.9 billion euros in expenses in the first half of 2024.
Market Reaction
As of 09:50 London time, Airbus shares listed in Europe had dropped by 10.75%. This reflects investor concerns over the revised forecasts and the potential long-term impacts on the company’s financial health. Airbus is set to release its half-year results on July 30, providing further details on its financial performance and future outlook.
Industry Impact
Airbus’s announcement comes at a time when the aviation industry is grappling with a complex mix of recovering from the COVID-19 pandemic and ongoing supply chain disruptions. The aerospace sector has faced significant challenges in maintaining production schedules and managing costs, issues that are clearly affecting Airbus.
Investors are likely to remain cautious until there is more clarity on how Airbus plans to address supply chain issues and manage costs in its space systems division.
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