Airbus Earnings: Plugging Away at Faster Jet Deliveries, Limited Tariff Hit

Key Morningstar Metrics for Airbus

• Fair Value Estimate: $41.20
• Morningstar Rating: ★★★
• Morningstar Economic Moat Rating: Wide
• Morningstar Uncertainty Rating: Medium

What We Thought of Airbus’ Earnings

Airbus EADSY reported sales 6% higher than in the first quarter of 2024, led by an 11% increase in its defense business and a 4% increase in revenue on six fewer aircraft delivered in the commercial business. Adjusted operating profit of EUR 624 million rose 8% on EUR 13.5 billion consolidated revenue.

Why it matters: Having made most of the requisite investments in facilities, tooling, and hiring of personnel to do so, Airbus’ progress increasing commercial jet output in the face of very healthy demand is constrained primarily by a few of its key suppliers.

• The CFMI joint venture between GE Aerospace GE and Safran SAFRF supplies engines for most of the very popular A320 family of jets, and ramping up to finish 75 of these per month by 2027 is proving difficult for both Airbus and CFM, but they have pledged to do so.
• Spirit Aero Systems, which will be acquired by Boeing later in 2025 and split off its Airbus-related operations to Airbus at the same time, is late in supplying key components like parts of the A350 fuselage, as well as wings, pylons, and fuselage parts for the A220 family of jets.

The bottom line: We haven’t altered our forecast for Airbus, and we think it may yet meet the goal of delivering 820 jets this year. We haven’t altered our EUR 165 per share fair value estimate for the wide-moat manufacturer, but currency fluctuation lowered our fair value estimate per US depository share to $41.20.

Between the lines: Management cited several reasons that import tariffs, if enacted for the long term, would have some (albeit muted) effects on its costs in some regions, particularly the United States, while echoing other global aerospace firms’ call for a return to the zero-tariff regime in place since 1979.