Airbus earnings soar on higher output of rival to Boeing’s Max

Bloomberg

Airbus SE earnings surged in the first quarter as the European planemaker churned out higher numbers of the A320 narrow-body jet that’s the biggest global rival to Boeing Co’s grounded 737 Max.
The company delivered 126 A320s, a model that appears to have overcome a run of engine manufacturing faults just as the 737 faces questions about its future after two fatal crashes in five months.
Adjusted earnings before interest and tax jumped almost 40-fold to 549 million euros ($614 million), according to a statement, providing a solid starting point for Chief Executive Officer Guillaume Faury, who took over from long-time head Tom Enders.
While some 737 Max operators have indicated that they’ll consider a switch to Airbus’s latest A320neo, the Toulouse, France-based company has said it isn’t banking on a flurry of new orders, partly because its narrow-body production capacity is sold out over the next few years.
Faury said he in any case expects that the crisis at Boeing will be “temporary.” Still, the commercial aircraft market is robust and Airbus is evaluating its ability to lift A320 production capacity, he said, reiterating a target for 880 to 890 jetliner deliveries across the lineup in 2019.
Airbus shares traded 0.8 percent lower at 121.96 euros in Paris, giving a market value of 94 billion euros. The stock has surged 45 percent this year, outstripping Boeing, where gains have been limited to 18 percent as it battles to return the Max to service.
With the issues concerning Pratt & Whitney engines for the A320neo seemingly resolved, deliveries of the plane are set to “dominate,” Jefferies analyst Sandy Morris wrote in a note.
That should outweigh any negativity surrounding the early termination of the A380 superjumbo programme, which contributed to a 58-plane reduction in the order backlog in the quarter, he said.