EADS expects its Airbus unit to capture new gross orders for up to 300 aircraft this year, “even if it is becoming more challenging in the current market environment,” according to a company statement attached to its first-quarter earnings release. Based on a stable delivery assumption and a conversion rate of €1 to $1.39, EADS predicts that revenue should run roughly in line with last year’s.
EADS’s projections for Airbus come after the European airframe builder struggled to maintain a positive net order tally. By the end of April the company had logged gross firm orders for 30 airplanes and cancellations of orders covering 19, giving it a net order total of 11 airplanes for the year.
Even though it said it expected earnings to fall this year, it said “a robust underlying business” will result in a “significant positive” result, despite the negative effects of increased research and development expenses, hedging and price deterioration, and more customer financing and support activity costs.
EADS also said that a reduction in advance customer payments at Airbus and a projected build-up of inventory in this year’s fourth quarter due to a drop in A320-series production will negatively affect free cash flow, as will the recently announced cut in A380 deliveries from 18 to 14.
Meanwhile, largely due to a drop in Airbus deliveries from 123 in the first quarter of last year to 116 during this past first quarter, group revenue fell from €9.9 billion ($13.5 billion) to €8.5 billion ($11.58 billion). Net revenue totaled €170 million ($231.6 million), compared with €285 million ($388.24 million) during last year’s first quarter.