By Mauro Orru


Airbus lost more than $10 billion in market value after the group lowered its commercial aircraft delivery goal and cut financial targets for the year due to supply-chain hurdles and an impairment related to its space activities.

Airbus shares in Paris slumped more than 9% on Tuesday, giving the group a market value of around 107.86 billion euros ($115.79 billion), according to FactSet. The group's market value stood at about EUR118 billion on Monday.

The European plane maker said in an update to investors late Monday that it would no longer be able to deliver about 800 commercial aircraft to customers this year, lowering that goal to roughly 770 planes due to persistent supply-chain issues mainly in engines, aerostructures and cabin equipment.

The aviation industry is still reckoning with supply-chain snags that have made it harder to procure some raw materials and spare parts, slowing aircraft production and, consequently, deliveries. Airbus Chief Executive Guillaume Faury said in April that supply-chain tensions were continuing.

Shares of companies that supply aircraft equipment and components like MTU Aero Engines, Rolls-Royce Holdings and Safran fell in European morning trading following supply-chain remarks from Airbus management.

The downgrade to its aircraft delivery goal comes as Airbus is cashing in on plane orders while its rival Boeing continues to grapple with the fallout from an Alaska Airlines emergency landing in January that prompted a temporary grounding and immediate inspections of Boeing 737 MAX jets.

Airbus counted 237 net orders this year by the end of May compared to Boeing's 130. Now, Airbus faces the task of making good on those orders while it navigates strained supply chains as airlines are still scrambling for planes to meet strong demand for international air travel.

Meanwhile, the group said it now expects to produce 75 of its A320 narrow-body aircraft a month in 2027, a year later than planned. On the A330 wide-body, it is still aiming for four a month in 2024, and 12 of its bigger A350 model a month in 2028.

Airbus also faces challenges in its space activities. The group said it would book a charge of roughly EUR900 million in its first-half balance sheet due to updated forecasts on schedules, workload, sourcing, risks and costs over the lifetime of some telecommunications, navigation and observation programs.

Going forward, Airbus expects adjusted earnings before interest and taxes--its preferred measure of profitability--of around EUR5.5 billion this year, down from a previous forecast range of EUR6.5 billion to EUR7 billion. Free cash flow before customer financing--a metric closely watched by analysts and investors--is now projected at around EUR3.5 billion, down from roughly EUR4 billion previously.


Write to Mauro Orru at mauro.orru@wsj.com


(END) Dow Jones Newswires

06-25-24 0403ET