Shares of Airbus SE took a sharp downturn on Tuesday, falling by 9% after the aerospace giant announced a downward revision of its financial targets for 2024. The company cited challenges in its supply chain and unexpected costs within its space systems division as key reasons behind the adjustment.
Airbus disclosed on Monday that it now anticipates its adjusted earnings before interest and taxes (EBIT) to reach approximately 5.5 billion euros ($5.9 billion) for the year, down from an earlier forecast range of 6.5 to 7 billion euros issued just two months ago.
The company also revised its outlook on aircraft deliveries, scaling back its expectations to around 770 commercial aircraft compared to an earlier estimate nearing 800. Airbus attributed this adjustment to ongoing supply chain disruptions, particularly affecting engines, aerostructures, and cabin equipment crucial for its manufacturing processes.
In addition to the challenges in its commercial aircraft business, Airbus acknowledged significant hurdles in its space systems division. The company disclosed it would incur charges of approximately 0.9 billion euros in the first half of 2024, citing “commercial and technical challenges” impacting programs related to telecommunications, navigation, and observation.
According to Airbus, these adjustments reflect updated assumptions on schedules, workload, sourcing, risks, and costs across various programs within the space systems segment.
Investors reacted swiftly to the news, with Europe-listed shares in Airbus plummeting by 9.17% as of 8:27 a.m. London time, underscoring concerns over the company’s ability to navigate persistent supply chain disruptions and unexpected financial burdens.
Airbus is scheduled to release its half-year financial results on July 30, offering further insight into the impact of these challenges on its operational performance.
The company’s setbacks come after an earlier indication of weaker-than-expected operating profit for the first quarter of 2024, signaling ongoing financial headwinds in the competitive aerospace sector.
As Airbus continues to grapple with these issues, market analysts and industry observers remain attentive to any further developments that could influence the company’s recovery trajectory in the coming months.
