European aerospace giant Airbus EADSY witnessed a significant drop in its shares on Tuesday following the company’s announcement of a downward revision of its 2024 targets. The company attributed the revision to supply chain challenges and additional costs in its space systems division.
What Happened: Airbus’ shares fell by over 10% on Tuesday, with the company revising its 2024 adjusted earnings before interest and taxes to approximately €5.5 billion (approx. $5.9 billion). This is a significant drop from the previous estimate of €6.5 billion to €7 billion.
"Airbus is facing persistent specific supply chain issues mainly in engines, aerostructures, and cabin equipment," the firm said.
The company also revised its expected aircraft deliveries for 2024, now forecasting around 770 commercial aircraft deliveries, down from the previous estimate of nearly 800. Additionally, Airbus delayed its production ramp-up timeline for the A320 aircraft.
Why It Matters: The guidance cuts are attributed to ongoing supply chain issues, particularly in engines, aerostructures, and cabin equipment. The company also noted additional costs in its space systems division, citing “commercial and technical challenges.”
These challenges have led to Airbus recording charges of approximately 0.9 billion euros in the first half of 2024. The company’s half-year results are scheduled to be released on Jul. 30.
The recent developments at Airbus are in line with the challenges the company has been facing in its supply chain. In May, it was revealed that Airbus was struggling with persistent shortages of parts and labor, potentially impacting its 2024 delivery targets.
Price Action: Airbus SE’s stock is trading at €132.52 on Tuesday, down 10.93%. Year to date, the stock has decreased by 6.20%, according to the data from Benzinga Pro.
Image Via Unsplash
This story was generated using Benzinga Neuro and edited by Kaustubh Bagalkote
© 2024 Benzinga.com. Benzinga does not provide investment advice. All rights reserved.
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