Airbus and Boeing, two of the world's largest aircraft manufacturers, have reported second quarter financial results that have outperformed forecasts. Both companies' CEOs have highlighted that aircraft manufacturers face a "complex" operating environment.
After Airbus released its financial results on Wednesday, July 26, its stocks experienced a minor uptick during European trading hours in Paris, rising just over 0.1%. In the US, Airbus shares rose by more than 1% at midday.
Boeing reported higher-than-expected revenue growth for the second quarter of the year. The company's losses were larger than the same period last year but not as severe as projected. The market had expected Boeing to "burn cash," but it instead generated substantial free cash flow. After the announcement, Boeing's shares opened 3.7% higher on Wednesday and saw an intra-day gain exceeding 7%.
Airbus Sticks to 720 Deliveries Forecast, Adjusts A320 Monthly Production
On the same Wednesday, Airbus announced that its Q2 revenue and profit exceeded expectations, but its first-half-year revenue fell short of forecasts, though profits remained higher than anticipated:
Q2 revenue reached 15.9 billion euros, above the predicted 15.75 billion euros; adjusted EBIT for the quarter was 1.85 billion euros, surpassing the anticipated 1.75 billion euros.
For the first half of the year, revenue totaled 27.66 billion euros, falling short of the 27.91 billion euros expected; however, first-half-year adjusted EBIT was 2.62 billion euros, better than the predicted 2.47 billion euros; EBIT for the first half of the year was 1.89 billion euros.
Airbus reported delivering 316 commercial aircraft in the first half of the year and remains confident in its goal of delivering around 720 commercial aircraft in 2023. The company expects to achieve a monthly production of 75 A320 aircraft by 2026.
However, Airbus did not mention a target of producing 65 planes monthly by the end of next year. Instead, it plans a so-called "tactical adjustment" to its production schedule, aiming to meet the current production rate of the A320, which stands at around 50 per month.
Boeing EPS Loss Lower than Expected, Free Cash Flow Reaches $2.58 Billion
On the morning of July 26th, during the American trading hours, Boeing announced:
Its Q2 operating revenue reached $19.75 billion, a year-over-year increase of approximately 18.6%, beating the analysts' forecast of an 11% growth to $18.53 billion. Adjusted EPS saw a loss of $0.82 per share, less than the expected loss of $0.84 per share. Adjusted free cash flow for Q2 was $2.58 billion, while analysts had projected a loss of $73.6 million. Q2 operating cash flow was $2.88 billion, surpassing the anticipated $435.6 million.
Boeing's Civil and Defense Business Revenues Exceed Expectations, Defense Incurs Unexpected Loss of $527 Million
Q2 revenue from Boeing's commercial aircraft and defense businesses exceeded expectations. The commercial aircraft sector brought in $8.84 billion, outpacing the $7.64 billion forecast. Defense, space, and security sector revenue totaled $6.17 billion, marginally higher than the $6.16 billion projected.
Boeing's defense business reported a loss in the second quarter, showing a $527 million deficit, a far cry from the expected profit of $102.3 million. This loss compares to the operating profit of $71 million recorded a year earlier.
Boeing Raises 737 Production Pace, Projects Positive Cash Flow in Q3
Boeing delivered a total of 136 aircraft in the second quarter, approximately 21% higher than analysts' predictions, representing a 12.4% increase from the 121 aircraft delivered in the same period the previous year.
Boeing still anticipates delivering between 400 and 450 of its popular 737 aircraft this year. It plans to increase the production rate of the 737 project to 50 aircraft per month by 2025/2026.
Boeing raised the monthly production target of 737 aircraft to 38 units, which, according to media estimates, represents a 23% increase from its previous production pace.
Boeing also restated its full-year free cash flow guidance of $3 billion to $5 billion. The company's CFO, Brian West, noted that the cash flow situation in the second quarter benefited from advanced payments from customers. He projected the company's cash flow for the third quarter to be in the "hundreds of millions" of dollars.
