Airbus offers grim guidance despite beating fourth quarter earnings estimates

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Airbus, the European conglomerate that shares the market for large jets with Boeing, reported fourth-quarter results on Thursday that were not inspiring reading. The fourth quarter figures were actually slightly better than consensus expectations. Its adjusted earnings before interest and taxes fell 35% to € 1.83 billion ($ 2.21 billion), in a 19% drop in revenue to € 19.75 billion. That was ahead of consensus expectations of an operating profit of € 1.66 billion on revenue of € 19.18 billion. The problem was orientation. Airbus AIR, -2.78% do not expect to deliver more aircraft in 2021, as the world is inoculated with COVID-19 vaccines, than the 566 it delivered in 2020. Airbus 0KVV, -3.73% expect its adjusted EBIT to increase to € 2 billion, after earning € 1.7 billion last year and € 6.95 billion in 2019. Free cash flow, excluding mergers and acquisitions and customer financing, is expected to break even. Read: US wine importers are now paying the price for the Trump administration’s trade dispute with the European Union

The outlook: The stock market reaction, if anything, was friendly, with stocks losing about 4% in morning trading. Bank of America analysts said Airbus’ earnings guidance appears conservative, even if deliveries haven’t changed this year. And management may just be trying to set a low bar: Airbus inserted the words “at least” before setting its 2021 guidance. Air France-KLM AF, -0.29%, an Airbus and Boeing BA customer, – 3.29%, also reported results on Thursday and said it expects capacity to return to 2019 levels by 2024, implying a more hopeful recovery in air travel. . From the Archives (Dec 2020): Tariffs on the dispute between Airbus and Boeing will be lifted by the UK after Brexit