Europe’s Airbus posted significantly lower second-quarter earnings on Tuesday due to higher expenses associated with investing in increased aeroplane production and mostly anticipated charges in its Space Systems division.
In the quarter, revenue increased marginally to 15.995 billion euros, but adjusted operating profit dropped by more than half to 814 million euros ($879.7 million), according to the largest aeroplane manufacturer in the world. Additionally, it charged 989 million euros for forward losses in its space business, which is a little bit more than the 900 million euros it had estimated when it issued a profit warning the previous month.
According to a poll conducted by the company, analysts had predicted, on average, adjusted operating income of 699 million euros on revenue of 15.822 billion euros for the second quarter. Despite this, profits exceeded analysts’ predictions. The charges total the amount written off Airbus’s balance sheet in less than five months, reflecting a new audit of possible losses on critical communications and navigation satellites in its struggling Space Systems division. The amount is just under 1.6 billion euros.
According to Guillaume Faury, the CEO of Airbus, “we are addressing the root causes of these issues,” in a results statement. According to industry sources, the OneSat satellite project and EGNOS, a system intended to increase the accuracy of current navigation signals, are largely responsible for the newly discovered risk.
Also Read:
Top 10 Real Estate Leaders in the Gulf and MENA Region 2024
US-Listed Cryptocurrency Stocks Decline After a Spike Inspired by Trump
