Airbus stock slides after slashing 2024 guidance, deliveries

Shares of Airbus (AIR.PA) are sliding Tuesday morning after the commercial aircraft manufacturer slashed its 2024 guidance for earnings and deliveries, expecting only to deliver 770 aircraft, versus the previously expected 800. Ongoing supply chain issues were a huge factor in this decision, according to the company.

Morning Brief Anchors Brad Smith and Seana Smith break down the latest developments for Airbus and what it could mean for the aerospace company moving forward.

For more expert insight and the latest market action, click here to watch this full episode of Morning Brief.

This post was written by Nicholas Jacobino

Video Transcript

Well, saying in the aerospace sector, let's talk about Airbus because shares today are sinking off just about 12%.

The company is slashing its 2024 guidance for earnings and deliveries.

Now expecting to deliver only 770 commercial aircraft this year.

That's a decline from the previous estimate of about 800 taking a look at what exactly this means here for the company going forward.

Deutsche Bank cutting its rating to hold following what it described as the quarter as a rather damaging warning here from Erebus.

And we're also seeing the ripple effect here through suppliers.

You're seeing a number of its suppliers here under pressure this morning.

So clearly the fact that they are cutting their guidance here.

Some of the supply chain issues continuing to be a real challenge here for the sector.

And as a result, they are far, uh Airbus is far from the only stock here taking a hit on the heels of this news.

Yeah, I'm surprised to see some of the airline operators that are actually anticipating taking delivery of some of primarily the Airbus, a 320 family of jets where that's been essentially pushed back in terms of the targets to produce 75 a month, that's been pushed back from 2026 to 2027.

As part of this, they held a call with analysts where the chief executive had discussed engines not being an issue in 2023.

And that the beginning of 2024 again becoming a significant issue.

And so that is a new situation that they were not expecting here.

They talked about cabin parts, they also talked about the engine maker or kind of the wired wider aerospace sector here.

The implications there.

At least that a lot of analysts were taking away from this, some of the engine makers that would also be impacted rolls Royce that was being impacted as well.

You saw their share prices following on this announcement too.

Um But again, it's going to have a larger implication for a lot of the airline operators that were expecting to take delivery that had already pushed out some of their targets because of the Boeing issues that were taking place and call after call over this past earning season.

You heard each of the CEO S of airline operators talking about how tricky the manufacturing landscape has become and how much that's impacted the route scheduling, the number of pilots that they're able to then on board and really move from training into full routes and full schedules.

And then additionally, just what that means for their own revenue.

Targets or even profitability targets in this near term too.

Um So all of these things considered gonna be interesting when we do kick off the earning season.

Of course, some of those airlines might be prone to give some of those updates uh very early on, early on.

Uh Delta is typically one of the first airlines, the first airline to really report and kick off the earning season too.