Airbus says tougher to meet jet delivery goal

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People take pictures as an Airbus Beluga XL transport plane lands near Toulouse Reuters

PARIS (Reuters) – European planemaker Airbus softened its key target for jet deliveries yesterday and warned that reaching it would be a “greater stretch” after a sequence of industrial problems.

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The cautious tone on deliveries – which implied a 2 percent cut in the annual target by changing its parameters to include a recently acquired Canadian jet – came despite higher than expected third-quarter core earnings and strong demand from airlines.

The maker of jetliners, satellites and helicopters said it had made an adjusted operating profit of 1.576 billion euros ($1.8 billion) in the quarter on revenues of 15.451 billion.

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Analysts on average expected third-quarter adjusted operating profit of 1.441 billion euros on sales of 15.316 billion, according to a Reuters poll.

Airbus shares rose 0.3 percent to 94.21 euros.

The company has been struggling with fresh industrial problems as production of its fast-selling A321neo passenger jet hit a snag in Hamburg, Germany, even as bottlenecks eased at some engine makers.

The problems with the A321neo, a model central to Airbus’s ambition to dominate the top end of the single-aisle market and thwart Boeing’s plans for a new mid-sized passenger jet, were first reported by Reuters.

“A lot remains to be done before the end of the year to fulfill commitments,” Airbus said in a statement.

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Airbus stuck to its headline target of around 800 commercial deliveries in 2018 but disclosed this now included 18 deliveries of the Bombardier CSeries jet, renamed A220.

Delegates at a Hong Kong gathering this week had warned that Airbus faced a challenge to meet the crucial goal.

Airbus also trimmed its cashflow target for the year.

Delays in supplies of engines for medium-haul jets from Pratt & Whitney and French-U.S. supplier CFM International are receding but Britain’s Rolls-Royce last week cut the number of engines it plans to deliver for the wide-body Airbus A330neo this year.

“We have engines and we have the airframes but the whole industrial planning had to be reshuffled time and again … next to some industrial challenges on our own operation,” Finance Director Harald Wilhelm told analysts.

Boeing too has suffered industrial problems, but the world’s largest planemaker last week reported stronger-than-expected profits, reflecting continued strong airliner demand.

European stocks bounce back, China growth worries linger.

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