Airbus is scheduled to report results for the third quarter on Wednesday. Here is what you need to know:
REVENUE FORECAST: The European plane maker is expected to post revenue of 17.91 billion euros ($20.07 billion) for the three months to the end of September, according to a market consensus provided by the company based on estimates from 22 analysts. The forecast is above revenue of 17.83 billion euros that Airbus reported a year earlier.
EARNINGS FORECASTS: Net profit should come in at 1.30 billion euros, according to the consensus, above 1.12 billion euros from a year earlier. Adjusted earnings before interest and taxes--Airbus's preferred measure of profitability--are expected at 1.78 billion euros compared with 1.94 billion euros a year earlier.
Airbus shares are down about 7% over the past 12 months. Supply-chain hurdles have held the company back: An engine shortage from Pratt & Whitney forced Airbus to slow production of its best-selling A320 jets earlier this year.
WHAT TO WATCH:
-- COMMERCIAL AIRCRAFT BUSINESS: The business is expected to be the main driver of what could be a roughly 8% year-on-year contraction in adjusted EBIT, Jefferies analysts wrote in a note to clients. They say lower aircraft deliveries than usual at this time of the year, costs for wide-body planes, research and development, foreign exchange and the integration of Spirit AeroSystems Holdings should weigh on profitability.
-- SUPPLY CHAINS: The company has faced hurdles in sourcing engines, seats, lavatories and other equipment in recent years, hindering aircraft production and, consequently, deliveries. Airbus dispatched 547 planes by the end of September, meaning it still needs to send out about 323 between October and the end of December to hit its annual target of roughly 870 deliveries.
RBC Capital Markets analysts wrote in a research note that they continued to view that goal as achievable despite the increase in deliveries that Airbus needs in the fourth quarter. The company tends to deliver more aircraft toward the end of the year.
-- GUIDANCE: Analysts aren't expecting the group to revise its annual financial targets. Airbus expects adjusted EBIT of around 7.5 billion euros and free cash flow before customer financing of around 4.5 billion euros in 2026.
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