In this news, we discuss the Airbus sets quarterly cash goal, takes heavy restructuring charge.
PARIS (Reuters) – Airbus AIR.PA said on Thursday it expected to break even in the fourth quarter, giving investors a first glimpse of future performance since the start of the coronavirus crisis after stopping the bleeding cash flow in the third quarter.
The European aircraft maker, which is cutting jobs to cope with collapsing demand for air travel, also took on a € 1.2 billion ($ 1.42 billion) restructuring charge that brought it down. leads to loss despite better than expected underlying operating profit.
Underlying or adjusted operating income of 820 million euros was down 49% from the same period last year, while revenue fell 27% to 11.2 billion euros.
Analysts had expected quarterly adjusted operating profit of 708 million euros on revenue of 11.439 billion, according to a consensus established by the company.
Airbus said it contained third-quarter cash outflows by narrowing the gap between production and deliveries to airlines, which collapsed at the start of the crisis.
However, the announcement came as France and Germany, where Airbus has its main factories, announced new restrictions in an attempt to contain a resurgence of the COVID-19 outbreak.
Airbus is grappling with a backlog of some 145 planes that airlines have deferred to absorbing into their fleets as they struggle to survive the crisis. He said that undelivered jet overhang had decreased to 135 planes by the end of September.
The company has supported deliveries in part by entering into storage agreements with airlines unable to directly put jets into service. But some industry sources said a new lockdown in France had raised new questions about its ability to deliver jets.
Airbus said its planning reflected discussions with customers.
The company said its new restructuring charge may need to be reassessed based on ongoing discussions with unions over 15,000 job cuts, although it said these had “made good progress.”
CEO Guillaume Faury warned staff last month that the cuts could include the first mandatory layoffs at Airbus as air travel did not rebound as quickly as expected.
Airbus also highlighted a recent effort to iron out a long-standing trade dispute with Boeing and the United States over aircraft subsidies by resetting the terms of French and Spanish government loans, saying it cost 236 million euros. .
The loans were deemed illegal by the World Trade Organization, which led to US tariffs on European products. The European Union this week officially secured the right to impose its own tariffs on US products over aid to Boeing that the WTO has ruled illegal. Both sides say they have withdrawn their illegal support.
Reporting by Tim Hepher, editing by Sarah White
Original © Thomson Reuters