Economy

Airbus shares rise as trading results show higher profits

Airbus shares rise as trading results show higher profits

Airbus announced on Thursday that it would increase its dividend by 11 percent to €1.50 per share following an 8-percent rise in profits before interest and tax to €4.25 billion ($5.31 billion) a year ago.

The company said that it surged to a profit of 1 billion euros ($1.25 billion) in the fourth quarter, from a loss of 816 million euros a year earlier, while revenue was stable around 23.8 billion euros.

Airbus's order intake increased from €134bn in 2016 to €158bn (£140bn) past year.

Airbus chief executive Tom Enders said the group had outperformed its own targets.

"There is no ignoring the scale of problems that Airbus senior management have needed to face up to this past year and that have included historic corruption allegations in relation to Airbus military, satellite and civil airplane operations [and] ongoing Pratt & Whitney PW1100G engine delivery problems on the A320neo", said defence and aerospace analyst Howard Wheeldon. The latest issue relates to a seal that Pratt replaced after an earlier version exhibited durability issues.

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Whilst revenues are stable, it wasn't all good news as it emerged that the company had written off another €1.3bn of debt on its troubled Airbus A400M transport plane. However, it promised that the charge would draw a line under the contract after years of cost overruns and performance setbacks.

Moreover, the planemaker also faces a series of worldwide bribery probes concerning the use of payments and middlemen in its marketing campaigns.

European plane maker Airbus said Thursday that its earnings improved previous year but it was hindered by further problems, both to its long-troubled military aircraft program as well as more recent engine issues on its single-aisle models.

"Airbus reported strong 2017 numbers for adjusted EBIT, net income and free cash flow which were clearly ahead of our estimates", wrote German bank Bankhaus Lampe, which kept a "buy" rating on Airbus shares.