Airbus Q1 earnings fall after delivering fewer planes

Airbus Group said earnings fell in the first quarter after its airliner unit delivered fewer planes, while cash flow improved.

Earnings before interest, tax and one-time items fell to €651 million ($722.8 million) from €700 million, beating an estimate of €602 million by analysts polled by Bloomberg.

Airbus reiterated 2015 guidance for “higher revenues and a slight increase in Ebit before one-offs.”

Net income rose to €792 million from €439 million, aided by the sale of shares in Dassault Aviation.

Airbus handed over a record 629 planes in 2014 and is aiming for slightly more this year.

The Toulouse, France-based planemaker delivered one A350 in the quarter and is targeting a production ramp-up to 10 a month by 2018.

The manufacturer also expects to break even in 2015 on production of A380 superjumbos.

“We had a good start into 2015, with a solid operational performance and improved cash generation, further supported by asset sales,” chief executive Tom Enders said in the statement.

The company will “review capital allocation towards the end of the year” as it progresses with the A350, the more-efficient A320neo and divestments, he said.

Airbus in the quarter booked a gain of €697 million from the sale of a 17.5 per cent stake in Dassault, the French maker of combat jets and Falcon corporate planes.

“The result looked quite good for a quarter that wasn’t supposed to be stellar,” said Yan Derocles, an analyst at Paris-based Oddo Securities, who has a “buy” rating on the shares.

“What struck me most was the excellent cash management.”

Airbus said free cash flow before mergers and acquisitions improved significantly to an outflow of €1.14 billion compared with an outflow of €2.06 billion in the year- earlier quarter, reflecting the “continued focus on cash control.”

Proceeds of about €1.6 billion from the sale of the Dassault shares boosted total free cash flow to €452 million euros from the year-earlier outflow of €2.03 billion.

Group sales fell 3.9 per cent to €12.1 billion in the quarter. The namesake aircraft operation contributes two- thirds of revenue of revenue at Airbus.

Order intake for the first three months was little changed at €21 billion from a year earlier.

- Bloomberg