Airbus has just released its half-year 2018 consolidated financial results, demonstrating higher than expected second-quarter earnings and reaffirming its guidance for the full year. The report from Europe’s largest aerospace group came a day after its U.S. rival Boeing posted its own better-than-expected quarterly profit and revenue. So who performed better?

Airbus' headaches and gains

According to the report, published by Airbus on July 26, 2018, A320neo deliveries accelerated following delays in engine supplies and the group‘s core profit doubled thanks to cost improvements on its A350 jet program.

Airbus states it reached a turning point with A320neo deliveries by the end of May, as the number of stored jets has started to decline having peaked at 100. Although deliveries picked up during the reported period, the manufacturer says “risks remain” to meet a “challenging” delivery target of 800 aircraft in total for 2018.

Nevertheless, Airbus, for the first time, delivered more of the NEO (new engine option) version in the second quarter than the CEO (current engine option): a total of 110 A320neos were delivered compared to half-year 2017 results that showed only 59 aircraft delivered.

As for the A350 program, the introduction of the aircraft has gone relatively smoothly with the first A350-1000s delivered to Qatar Airways and Cathay Pacific during second-quarter. According to the group, “good progress” was made in costs compared to a year earlier as Airbus ramps up production towards the targeted goal of 10 aircraft per month by year-end.

“The first half financials reflect the back-loaded deliveries due to A320neo engine shortages, while on the positive side there was a strong improvement on the A350 program,” sums up Airbus CEO Tom Enders in the report.

Regarding its military transport program – the A400M – the manufacturer says it is “making progress operationally, on improving capabilities as well as in negotiations with governments for the necessary contract amendment.”

A total of eight of these aircraft were delivered (the same amount as in the first half of 2017). Airbus reports a $114 million (€98 million) provision increase during the first half of 2018 mainly due to price escalation.

So here is the breakdown: the group’s quarterly adjusted operating earnings soared to $1.35 billion (€1.15 billion), compared to $667 million (€572 million) in 2017; revenues increased by 8% to $17.269 billion (€14.851 billion).

Airbus’ order backlog by units totaled 7,168 commercial aircraft as of June 30, 2018, according to the report.  However, the group states that market demand “remains strong” for its portfolio (which now includes the A220).

At the recent Farnborough International Airshow 2018, the plane maker announced orders and commitments for a total of 431 single-aisle and wide-body aircraft (although these are not yet reflected in the order book and it remains to be seen how many will be fulfilled).

Which is why Enders says, “Our operational focus in commercial aircraft remains squarely on securing the production ramp-up.” In fact, Airbus is undergoing its largest industrial overhaul in history of the company.

Boeing's setbacks and development

Airbus’ results came a day after rival Boeing posted its better-than-expected quarterly profit and revenue. The financial report, released on July 25, 2018, shows Boeing’s net profit was up 26% to $2.2 billion and revenue rose 5% to $24.3 billion in the second quarter of 2018. Boeing called the results “strong”, but admitted they were affected by increased costs ($426 million higher) on its delayed KC-46 in-flight refueling tanker program.

With 194 aircraft delivered this quarter, and another 239 net orders (out of which 59 for the B787), Boeing total sales result amounts to $24.3 billion. The order book currently contains nearly 5,900 commercial aircraft, the backlog growing to $488 billion.

At the July’s Farnborough Airshow, Boeing signed a total of 673 orders and commitments for commercial aircraft, out of which the absolute majority – 564 – were placed for the single-aisle 737 MAX variants. The plane maker still expects to deliver between 810 and 815 commercial planes this year.

The company’s Commercial Airplanes second-quarter revenue was $14.5 billion, with 194 airplanes delivered along with 239 net orders. According to Boeing, the results reflect “strong operating performance on production programs, including a higher 787 margin”.

The company explains that the KC-46 tanker program increased costs by $307 million, due to “higher estimated costs of incorporating changes into six flight test and two early build aircraft as well as additional costs as we progress through late stage testing and the certification process”.

Meanwhile, the Defense department finalized the production of 28 F/A-18 Super Hornets ordered by Kuwait, received contracts for 18 additional F/A-18 Super Hornets and 3 P-8 Poseidon aircraft for the U.S Navy, and was awarded a multi-year contract for 58 V-22 Osprey aircraft.

"We are seeing the results of our One Boeing approach as our teams work together across the Boeing enterprise to deliver value to our customers and grow our business.  In the quarter, we generated improved revenue and earnings, delivered strong cash and captured $27 billion in new orders," said Boeing Chairman, President and CEO Dennis Muilenburg.