Airbus shares sink as engine problems cause 52pc profit drop

Shares in Airbus (EPA:AIR), one of the world’s largest aircraft manufacturers, fell on Thursday after the group reported a 52 percent profit drop for the first quarter.

Problem with its engines in the new A320neo passenger plane had a negative impact on trading, with adjusted operating profit falling to 240 million euros. This profit drop came despite a 7 percent to 12.988 billion euros.

In a statement, Airbus confirmed that the engine issues “need to be resolved”, and that it expected profit for the next financial year. In 2017 Airbus expects to deliver over 720 aircraft and to report mid-single-digit percentage growth in operating income.

“New order activity was low in Q1 as predicted but let’s not forget that our strong order book of over 6,700 commercial aircraft supports our ongoing production ramp-up. Programme execution remains key for all our businesses,” said Tom Enders, Airbus chief executive.

The disappointing Airbus results come just one day after biggest rival Boeing reported a 19 percent rise in first-quarter profit. Shares in Airbus dropped sharply at market open but have since gained ground, currently trading down just 0.88 percent at 73.44 (1027GMT).