Airbus announces special dividend, extending lead over Boeing

• Airbus has unveiled a special dividend following higher 2023 results, driven by increased demand for jetliners despite a $215 million charge at its Space business.
• The commercial planemaker is benefitting from a surge in orders, accumulating cash reserves compared to rival Boeing facing debt issues.
• Shares were slightly lower due to cautious financial forecasts for 2024 and a lack of updates on a broader share buyback.

Europe’s Airbus unveiled a special dividend on Thursday after posting higher 2023 results, buoyed by resurgent demand for jetliners and despite a fresh charge of $215 million at its troubled Space business.

The world’s largest commercial planemaker said core adjusted operating profit rose 4% to 5.8 billion euros as revenue climbed 11% to 65.4 billion, and predicted core profit of 6.5 to 7.0 billion euros in 2024.

For the fourth quarter, adjusted earnings came in just below market forecasts compiled by the company at 2.21 billion euros.

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Airbus is riding a wave of orders from airlines coping with a rebound in travel demand from the pandemic, helping it to build up cash reserves in contrast with U.S. rival Boeing which is mired in debts stemming from a series of crises.

Logos of Airbus are seen at the Milipol Paris, the worldwide exhibition dedicated to homeland security and safety, in Villepinte near Paris, France, on Nov. 15, 2023. (REUTERS/Sarah Meyssonnier/File Photo)

Airbus proposed an unchanged regular dividend of 1.8 euros a share, and added a special dividend of 1 euro per share as net cash topped the 10-billion-euro threshold previously identified as a potential trigger for returning more cash to shareholders.

Shares were fractionally lower in early trading, however, with some analysts pointing to cautious financial forecasts for 2024 and a lack of fresh updates on a broader share buyback.

Investors have been pushing Airbus for a buyback as it extends a lead over Boeing in the single-aisle jet market.

Chief Financial Officer Thomas Toepfer said Airbus had chosen the special dividend to act quickly and to signal that it was sticking to its pledges on distributing cash.

Airbus forecast around 800 jet deliveries for 2024 but announced a further delay in entry to service of its A321XLR single-aisle jet to the third quarter from the second. The first customer airplane entered final assembly in December.

The company’s forecasts are subject to no further disruption to tight global supply chains or the world economy.

Some analysts found the outlook cautious, even though Airbus and others continue to wrestle with supply constraints.

“We had seen 800 (deliveries) as the floor that investors were looking for, and had also expected 7 billion euros as the EBIT guide,” Bernstein analysts said in a note.

PRODUCTION TARGET

The Space unit charge brings the total written off in that segment last year to 600 million euros and comes a day after Reuters reported that CEO Guillaume Faury had told staff that large, unexpected charges in the business were “not acceptable”.

The charges helped push divisional Defence and Space profits down 40% to 229 million euros while Helicopters rose 15%.

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Airbus is among European companies facing fierce competition from U.S. launchers and a new generation of low-cost satellites.

Faury, however, told staff in a letter last month that Airbus is better off with a high-performing Defence and Space business than without a presence in those areas.

On Thursday, he said Airbus would continue to monitor its exposure in Space.

Faury also said Airbus was “on our plan” to reach a key production target of 75 single-aisle jets a month in 2026 and that he remained confident in the goal, which is central to Airbus’ industrial plans in the busiest part of the market.

Some suppliers remain more conservative, however, telling Reuters that Airbus is producing around 50 of the jets a month compared to a production plan that had foreseen 58 by end-2023.