Monday, July 15, 2024
26 C
Brunei Town

Airbus shares tumble after profit warning

AFP – Shares in Airbus tumbled yesterday after the European aerospace giant reduced its annual financial targets due to lower deliveries and a charge related to its space unit.

Airbus, the sixth biggest company on the Paris CAC 40 stock market index, was down around 11 per cent to EUR132.28 (USD142) per share in late morning deals, its biggest drop in more than two years.

Airbus dragged down the shares of other groups involved in the aviation sector, including Safran, Thales and Dassault Aviation.

The European giant, which leads the aeroplane manufacturing sector along with United States rival Boeing, said late on Monday it now intends to deliver around 770 commercial aircraft in 2024, down from the 800 it forecast previously. It delivered 735 commercial aircraft last year.

Deliveries are key for Airbus’s finances as it gets paid when aircraft are transferred to customers.

An Airbus A319neo. PHOTO: AFP

It also announced it would book a charge of EUR900 million (USD965 million) for its satellite business.

The setbacks prompted Airbus to reduce its forecast for its 2024 operating profit to EUR5.5 billion, down from its previous guidance of between EUR6.5 billion and EUR7 billion.

Deutsche Bank analysts described it as a “stunning profit warning” and no longer recommended buying company shares.

“The dust needs to settle before we can turn positive again,” they said in a note.

Analyst Chloe Lemarie at Jefferies investment firm said Airbus “is facing more challenges than expected”.

Airbus will release half-year results on July 30.