February 14, 2019 / 5:59 AM / 6 months ago

Airbus' fourth-quarter profits beat expectations, shares rise

TOULOUSE, France (Reuters) - Airbus on Thursday posted stronger than expected fourth-quarter results overshadowed by a decision to close its flagship A380 programme, while forecasting higher aircraft deliveries and profits in 2019.

The Airbus logo is pictured on a scale model of an Airbus A350 as Airbus announces annual results in Blagnac, near Toulouse, France February 14, 2019. REUTERS/Regis Duvignau

The robust set of earnings lifted Airbus’ shares, which were up 5.4 percent in early session trading.

Europe’s largest aerospace group posted quarterly adjusted operating profit of 3.096 billion euros ($3.5 billion), up 56 percent from the same period in the previous year, after accelerating jetliner deliveries in the last three months to make up for earlier delays.

Revenues rose 11 percent to 23.286 billion euros.

Analysts had expected quarterly adjusted operating income of 2.292 billion euros on revenues of 22.372 billion, according to a survey carried out for Reuters..

Airbus predicted 880-890 commercial aircraft deliveries - up from 800 in 2018, and a 15 percent higher operating profit this year.

The world’s second-largest planemaker behind U.S. rival Boeing said it would reach a targeted monthly production rate of 60 narrow-body A320-family jets a month by mid-year and would increase this to 63 a month in 2021.

Production of the jets dominates Airbus profits.

Airbus shares surged on the stronger-than-expected earnings and a decision to scrap production of the loss-making A380.

Incoming chief executive Guillaume Faury, who steps up from running the planemaking division to run the combined aerospace and defence group in April, signalled a broad continuity in strategy, telling analysts “we will keep going in the same direction”.

Faury has commissioned a strategy review.

The former carmaking executive said he saw “very strong potential for increased profitability and free cashflow”.

Reporting by Tim Hepher; Editing by Sudip Kar-Gupta

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