Airbus Reports Revenues, Profits Rise as Orders Remain Flat

Airbus wrote new orders for 496 aircraft at Farnborough worth a total of $75.3 billion. That will nearly close the $90 million difference between first half new orders in 2013 and 2014. The total value of the company’s backlog in the first half of both years was around €626 million.

The company’s outlook for 2014 is based on no major disruptions in the global economy:

In 2014, Airbus deliveries should be about the same level as in 2013, including the first A350 XWB delivery. Net commercial aircraft orders should be above the level of deliveries. Assuming an exchange rate of € 1 = $ 1.35, Airbus Group revenues should be stable compared to 2013. … The 2015 return on sales target of 7-8 percent(6) is unchanged pre A330neo development, which is assessed to have a net impact of around -70 basis points. … Airbus Group is targeting breakeven free cash flow before acquisitions in 2014.

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When Boeing Co. (NYSE: BA) reported second-quarter results last week, the company raised its outlook for 2014 earnings per share and revenues, but investors hammered the shares because the second-quarter profit was built around a significant non-recurring tax benefit.

Airbus has had more than 225 orders cancelled so far this year, an occurrence the company now says is part of everyday life for jet makers. The cancellations are made on orders for older models and then many new orders are written for the new models. The Airbus A320neo family, which competes against Boeing’s 737 MAX family, saw 65 such cancellation/new orders in the first half of this year.

Airbus is also preparing to sell its 46% stake in Dassault Aviation, a family-controlled French firm that makes business aircraft and combat fighter planes. The French government has the right of first refusal on the disposal of some or all of the stake, and Airbus’s CEO said it is not a question of if there will be a sale, but when that sale will occur.

Airbus shares were up more than 4% in over-the-counter trading (EADSY) Wednesday morning. Boeing stock has slipped about 3.5% since reporting earnings last Wednesday.

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