Shares of European airplane manufacturing company Airbus Group SE (PA:AIR) rallied during the trading session on Thursday following a positive earnings report that included higher sales due to the increase in its production over the past year. Airbus also announced that its deliveries over the past year have increased leading to an improved free cash flow for the company.
Airbus Earnings
Profits of the company surged by as much as $1.25 billion or 1 billion euros for the fourth quarter of the year which is a big improvement compared to their losses of 816 million during the same period last year.
Airbus also posted a revenue of 23.8 billion for the fourth quarter while its full-year net income grew thrice as much to 2.9 billion euros. The stronger cash flow of the company is also expected to rise further in the coming quarters.
However, the company experienced charges worth 1.3 billion euros of $1.6 billion to its A400M military transport plane following an agreement with seven European NATO buying countries due to the continued delays in the delivery of the latest troop carrier.
Airbus delivered an adjusted operating profit of 4.253 billion euros for the whole year on an overall revenue of 66.767 billion euros slightly missing most expectations that the company would post 67.343 billion euros in revenue. However, the company forecasted a growth of 20% in their core profits.
2018 Production Increase
This year, Airbus plans to raise its production to as much as 800 airliners after being able to ship 718 planes last year. Currently, Airbus is also planning to boost the production of single-aisle planes to 60 aircrafts per month by next year from their current production of around 50 per month since last year.
Airbus is also considering increasing the production rate further due to the growing demand in the market. During the past year, large airplane manufacturers like rival company Boeing (NYSE:BA) have experienced a rise in the demand for commercial planes caused by growing passenger numbers as well as an overall demand for an expansion of the travel industry.
The company is currently in the middle of talks to boost the single-aisle jet production higher with Airbus chief executive Tom Enders getting in touch with engine markers in able to deliver on their previous agreements following a number of delivery delays during the past year. Enders stated that the company has now a strong commitment from a number of their partners in able to avoid any missed deliveries in the coming months.