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The Euro dropped to its lowest level in a year and a half as higher U.S. inflation data led to expectations of higher interest rates in the United States. While currency swings are common, this specific move is a structural advantage for Airbus.
Airbus builds most of its planes in Europe, meaning its labor and manufacturing costs are largely in Euros. However, aircraft are priced and sold globally in U.S. Dollars. When the Euro is weak, the Dollars Airbus receives from airlines stretch further to cover its local costs, which can help protect or even expand its profit margins.
Source: WSJ
Airbus delivered about 74 aircraft in October, according to reports. This monthly total is a key indicator of how well the company is managing its supply chain and factory floors to meet its goal of delivering around 770 planes for the full year.
For a company with a massive backlog of over 9,000 orders, the main challenge is not finding buyers but building the planes fast enough. These delivery numbers matter because Airbus receives the bulk of its payment only when a finished jet is handed over to an airline. Steady monthly progress suggests the company is successfully navigating the parts shortages that have slowed production across the industry.
Source: Reuters
Airbus is teaming up with a Vietnamese airline and a technology firm to build new tools using artificial intelligence. The project will use data from Skywise, the Airbus digital platform that tracks how planes are performing, to find ways to make flights more efficient. While this is a small step in one region, it shows how Airbus is trying to sell more than just hardware. By building software that helps airlines run their fleets better, the company can create a more steady stream of income that does not depend entirely on delivering new planes.
Source: Business Wire
Airbus reported earnings of 49 cents per share, which was higher than the 47 cents analysts had predicted. While the company beat profit expectations, its actual earnings fell about 9 percent compared to the same time last year. This dip happened because the company is still struggling to get parts from its suppliers fast enough to meet its massive order backlog.
The real focus for the company remains its plan to ramp up production of its popular A320 jets. Airbus has thousands of planes on order, but it can only turn those orders into cash once the planes are finished and delivered. While the slight drop in profit shows the strain of these factory delays, the fact that earnings came in ahead of estimates suggests the company is managing its costs well while it waits for the supply chain to catch up.
Source: Company earnings report
The US Trade Representative warned that a record-breaking loan from the European Investment Bank to Airbus could restart a long-running trade dispute. For years, the US and Europe fought over government subsidies for their respective plane makers, Boeing and Airbus, before reaching a truce to stop hitting each other with retaliatory taxes.
If this loan is seen as an unfair subsidy, it could lead to new tariffs, which are extra taxes on imported goods. While this is just a warning for now, it is worth watching because a return to trade friction could make it more expensive for Airbus to deliver planes to US airlines.
Source: Reuters
Management consistently sets a bar they can clear, delivering eight straight quarters of results that land just ahead of expectations even as factory delays slow down production.
| Expectation | |
|---|---|
| EPS | $0.83 |
| Revenue | $33.57B |