Airbus Posted Strong 1Q Cash Flow, Profit, But Remains Cautious on 2021 -- Earnings Review

By Olivia Bugault

Airbus SE released first-quarter results on Thursday morning. Here's what we watched:

NET PROFIT REVIEW: The European plane maker swung to a net profit of 362 million euros ($438.9 million) in the quarter, from a net loss of EUR481 million for the same period last year.

EBIT: Airbus's more closely watched adjusted earnings before interest and taxes was 9% ahead of market expectations at EUR694 million. Last year, the company posted an adjusted EBIT of EUR281 million.

WHAT WE WATCHED:

-IMPRESSIVE FCF: The company's free cash flow was strong in the first quarter at EUR1.16 billion, ahead of expectations and far above last year's cash outflow of roughly EUR8 billion, Citi said. "The strong cash flow was primarily due to EUR800M reduction in inventory and, we suspect due to the oddity of phasing of deliveries," the bank said.

-RECOVERY: "The path to recovery will not be linear," Airbus Chief Executive Guillaume Faury said during a media call. Some regions are showing signs of domestic air traffic rebound, while others are lagging behind such as Europe where restrictive measures are still largely in place, he said. India, where the number of Covid-19 infections have been surging these last weeks, is also a concern, Mr. Faury said.

-UNCHANGED GUIDANCE: Despite a positive quarter, Airbus reiterated its 2021 outlook, with no changes to production rates or timelines. At the least, Airbus still expects to match the 566 deliveries achieved last year and to increase the production rate of A320 family jets to 43 a month in the third quarter and 45 a month in the fourth quarter, from 40. "Much of the beat is due to well flagged fluctuations that will reverse in the rest of the year," Citi said.

Write to Olivia Bugault at [e-mail]

(END) Dow Jones Newswires

April 29, 2021 06:21 ET (10:21 GMT)

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