The Wall Street Journal
By Robert Wall
Updated Feb. 27, 2015 5:38 a.m. ET
Airbus Group on Friday said it would boost production of its popular A320 single-aisle jet, as Europe’s largest plane maker reported a 59% rise in full-year profit despite problems with a big military aircraft program.
Net income in 2014 was 2.34 billion euros ($2.62 billion), the Toulouse, France-based company said, compared with €1.47 billion a year earlier, when earnings were weighed down by costs linked to the new A350 long-range jet that entered service in January. Sales in the period rose 5% to €60.7 billion. The company proposed a record dividend of 1.20 a share, while its order book reached an all-time high of €857.5 billion.
“We achieved a significant improvement in profitability and cash generation in 2014 thanks to a record order book and strong operational performance in most areas,” Chief Executive Tom Enders said in a news release.
Airbus said it would hike output of the A320 plane to 50 jets a month starting in 2017. The world’s second-largest plane maker, which currently builds 42 of these planes a month, had already planned to reach a monthly production rate of 46 narrowbodies next year.
Airbus, which builds the A320 jetliner in Hamburg, Toulouse, Tianjin in China and is setting up a final assembly line in Mobile, Alabama, had an order backlog of 5,099 narrowbody planes at the end of January.
Airbus, the world’s second largest airliner maker, and larger rival Boeing Co. have enjoyed a surge of orders for new planes as airlines seek growth and look to replace less efficient models with more efficient jets. Boeing, which makes 42 of its single-aisle jets each month, is raising output of the 737 planes to 52 units a month staring in 2018.
The European plane maker also said it would further cut output of its A330 widebody plane to six planes a month from 2016 from 10 at present. The company had said it plans to reduce output to nine planes a month later this year as demand for the current model dries up. The plane maker is working on an updated version, called the A330neo for “new engine option,” that is due for its first delivery in late 2017.
Airbus expects commercial plane deliveries this year to rise, including production of 15 of the new A350 long-range jets and 30 A380 superjumbos.
Earnings per share and dividend also are due to increase, it said. Free cash flow should reach break-even, it said.
Earnings were negatively impacted by €551 million on renewed problems in building the A400M military transport plane that previously weighed on results when it fell years behind schedule and ran massively over cost. The issues caused Airbus to replace the head of its military aircraft programs last month. Airbus builds the A400M for eight customers, though deliveries have been marred by delays and technical defects. Airbus said it is in talks with A400M customers about delivery plans and how to enhance the aircraft’s features beyond the basic transport capabilities it now performs. The company this year is hoping to ramp up sales campaigns to secure additional orders for a program that remains unprofitable.
Original article can be found at: http://www.wsj.com
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