Airbus is set to report its second-quarter earnings later this month, and analysts at Metzler Capital Markets are optimistic. The German investment bank expects the aerospace giant to post revenue of about €20.2 billion for the quarter, along with adjusted operating profit of roughly €2.1 billion—both up from a year ago. The bullish outlook is driven by a strong delivery pace in the first half of 2024, particularly for the A320-family jets, which are the company's best-selling narrow-body aircraft.
Metzler also believes Airbus will reaffirm its full-year targets: around 870 commercial aircraft deliveries and about €4.5 billion in free cash flow (before customer financing). The company is scheduled to provide a business update on July 21 and release its full results on July 29.
Why Deliveries Matter More Than Revenue
For Airbus, the number of aircraft handed over to customers is a critical metric. That's because deliveries trigger large milestone payments from airlines and release working capital tied up in inventory. So even if quarterly revenue looks solid, the real test is whether the company can turn production into cash.
Supply-chain issues, particularly engine shortages, have been a persistent headache for Airbus and its rival Boeing. When parts arrive late, completed aircraft can sit on the tarmac, delaying customer payments and keeping costs on the balance sheet. Metzler argues these delays should be manageable this year, but the timing of deliveries in the second half—especially in the fourth quarter—will determine whether strong profits translate into the cash flow number investors care about.
The mix of aircraft being delivered also matters. Airbus has been delivering more A320-family jets, which are more standardized and help absorb fixed costs. But a heavy reliance on a single model also raises the stakes: any disruption to that production line could ripple through the entire delivery schedule.
What It Means for Investors
For everyday investors, the key takeaway from Airbus's earnings isn't just whether sales beat expectations. It's whether the delivery and cash flow timeline remains intact. If Airbus sticks to its 870-delivery target, that supports the €4.5 billion free cash flow goal. But any signs of delays—especially in engine supply—could push deliveries into 2025, weakening near-term cash generation.
Airbus shares have been under pressure this year amid supply-chain concerns, but the stock could get a boost if the company delivers a clean update. Investors should also watch for any commentary on the longer-term outlook, including the company's plans for 2028 delivery and profit targets, which were reportedly discussed at the Farnborough Airshow. RBC noted that Airbus may reveal those targets at the event.
In the broader market, aerospace and defense stocks have been mixed, with some investors rotating into smaller companies. Bank earnings have surged, and the Russell 2000 is poised for its best year in decades, but Airbus remains a bellwether for the global aviation industry.
The Bottom Line
Airbus's upcoming earnings are a test of whether the company can navigate persistent supply-chain challenges while hitting its delivery targets. Metzler's confidence is a positive sign, but the real proof will come in the second half of the year. For investors, the focus should be on cash flow and delivery timing—not just revenue growth.
As always, it's important to remember that past performance and analyst expectations are not guarantees of future results. Investors should consider their own financial situation and risk tolerance before making any decisions.
