By Mauro Orru


Airbus lost about $12 billion in market value after the group lowered its commercial aircraft delivery goal and financial targets for the year due to supply-chain hurdles and an impairment related to its space activities.

Airbus shares in Paris closed 9.4% lower on Tuesday, bringing the group's market value down to about 106.78 billion euros ($114.63 billion), according to FactSet. Airbus's market value stood at roughly EUR118 billion on Monday.

The European plane maker said in an update to investors late Monday that it would no longer be able to deliver about 800 planes to customers this year and lowered that goal to roughly 770, citing persistent supply-chain issues in engines, aerostructures and cabin equipment.

The aviation industry has been agonizing for years over supply-chain snags that have made it harder to procure some raw materials and spare parts, slowing aircraft production and, consequently, deliveries.

Airbus Chief Executive Guillaume Faury said in a call on Monday that engines had become a significant issue in recent months, adding that both RTX-owned Pratt & Whitney and CFM International--a joint venture between GE Aerospace and Safran--were falling short of delivery commitments.

Pratt & Whitney and CFM International didn't respond to requests for comment.

Shares of companies that supply engines and aircraft equipment, like Rolls-Royce Holdings, MTU Aero Engines and Safran, fell Tuesday as investors digested supply-chain remarks from Airbus management.

The downgrade to the aircraft delivery goal comes as Airbus's orders keep piling up while rival Boeing grapples with the fallout from an Alaska Airlines emergency landing in January, which prompted a temporary grounding and immediate inspections of Boeing 737 MAX jets.

Airbus counted 237 net orders through May this year compared with Boeing's 130. Now, Airbus faces the task of navigating strained supply chains to make good on those orders as airlines are still scrambling for planes to meet strong demand for international air travel.

Meanwhile, the group said it expects to produce 75 of its A320 narrow-body aircraft a month in 2027, a year later than planned. For the A330 wide-body, it is still aiming for four a month in 2024, and 12 a month for its bigger A350 model in 2028.

Airbus also faces challenges in its space activities. The group said it would book a charge of roughly EUR900 million in its first-half balance sheet due to new forecasts on schedules, workload, sourcing, risks and costs for some telecommunications, navigation and observation programs.

The group now expects adjusted earnings before interest and taxes--its preferred measure of profitability--of around EUR5.5 billion this year, down from a previous forecast range of EUR6.5 billion to EUR7 billion. Free cash flow before customer financing--a metric closely watched by analysts and investors--is projected at around EUR3.5 billion, down from roughly EUR4 billion previously.


Write to Mauro Orru at mauro.orru@wsj.com


(END) Dow Jones Newswires

06-25-24 1222ET