A More Conservative Airbus Can Gain Altitude
If the world finally moves on from Covid-19 this year, the plane maker’s cautious financial guidance could prove easy to beat
A move by Airbus to fly under the radar could be a wise one.
Shares in the European plane maker initially rose Thursday, after it released encouraging financial results for the final quarter. Operating earnings were 11% above the median analyst estimate. Free cash flow, which is even more important for aerospace firms, was almost twice as high as expected for the quarter, and amounted to €3.5 billion, equivalent to $4 billion, for 2021 overall. That echoes a better-than-expected cash performance at Boeing, its American rival.
Yet Airbus stock edged down as European trading got under way. The broader travel sector came under pressure amid fresh jitters about a potential war in Ukraine, but it may also have to do with the company’s somewhat underwhelming guidance. Targets for 2022 include flat free cash flow and the delivery of 720 commercial aircraft.
While these aren’t bad numbers, some investors were expecting more. Airbus managed to surpass its 2021 goal of 600 planes by 11 units, and was delivering 860 planes before the pandemic. Executives sounded cautious when addressing analysts Thursday.
Excerpt from WSJ
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