Europe’s Airbus reported on Thursday a steeper than expected 52 percent drop in first-quarter profit, weighed by weaker prices as it changes to new models and higher production costs, but reaffirmed targets for higher profits for the year.
The world’s second-largest planemaker after Boeing said adjusted operating profit fell to 240 million euros ($261.7 million), while revenues rose 7 percent to 12.988 billion euros.
Analysts were on average expecting adjusted operating income of 344 million euros, down 31 percent, and 5.5 percent higher revenues of 12.857 billion, according to a Reuters poll.
Airbus said it was still worried about problems with temperamental engines for its new A320neo passenger plane from Pratt & Whitney, and commercial exposure on the troubled A400M military aircraft program.
It expects deliveries of the A320neo once again to fall predominantly in the latter part of the year, but has said it hopes to avoid the last-minute rush seen in December last year.
The engine issues “need to be resolved,” Airbus said in a statement.
The Airbus planemaking business saw 31 percent lower profit despite a 13 percent rise in revenues. The Toulouse-based firm said this reflected a different mix of aircraft, with more of the new A350s delivered in the first quarter, “transition pricing” and higher production ramp-up costs. New aircraft tend to be sold at heavier discounts to spur further orders.
The Airbus Helicopters unit slipped into loss as the world’s largest commercial helicopter maker continues to suffer from the grounding of aircraft in UK and Norway, following a crash that killed North Sea oil workers.
For 2017, Airbus expects to deliver over 720 aircraft and to report mid-single-digit percentage growth in operating income.
Airbus’ results came a day after Boeing reported a 19 percent rise in first-quarter profit, with its U.S rival also lifting its full-year forecast.