Airbus Group Hit By $1.54 Billion In Charges In Second-Quarter
27 July 2016
Airbus Group (AIR.PA) took over 1.4 billion euros ($1.54 billion) in fresh charges for its troubled A400M military airlifter and its delayed A350 jetliner, but reaffirmed its targets as it posted lower quarterly earnings on Wednesday.
Delays in deliveries of another keenly awaited jet, the revamped A320neo jetliner, which competes with Boeing's (BA.N) upcoming 737 MAX, also weighed on Europe's largest aerospace group, whose core profits fell 4 percent in the second quarter.
Airbus Group posted 1.026 billion euros of charges for the A400M following gearbox problems and fuselage cracks and 385 million for the A350, whose deliveries have been held up by shortages of cabin equipment, triggering new penalty payments.
Core operating earnings before one-off items fell 4 percent to 1.183 billion euros in the second quarter as revenues slipped 1 percent to 16.572 billion euros. Analysts had on average predicted core earnings of 1.012 billion euros on revenues of 16.299 billion euros, according to a Reuters poll.
The charges for the A400M, coming on top of about 5 billion euros already written off in Europe's largest defense project, were roughly in line with analysts' expectations and came alongside various other balance sheet adjustments.
Airbus Group said ongoing negotiations over a revised delivery schedule for the A400M with seven European NATO buyer nations could have a "significant" further financial impact.
The Franco-German-led company confirmed a sharp cut in production of the civil A380 superjumbo to 12 a month in 2018 following weak sales for the world's largest four-engined jets.
It said it could not yet estimate the impact of a recent accident involving its H225 Super Puma helicopter in Norway.
Source : reuters.com