Safran hikes annual income guidance after Q3 revenue growth; shares climb

Safran (EPA:SAF ) stock climbed around 1% Friday after the French aerospace supplier raised its recurring operating income forecast for 2024 after third-quarter revenue growth, supported by strong demand for aftermarket services and aircraft equipment.

The company reported adjusted revenue of 6.64 billion euros ($7.19 billion) for the quarter, up from 5.83 billion euros in the same period last year.

Safran’s propulsion segment saw an 8.3% year-over-year increase, reaching 3.34 billion euros in revenue, while the equipment and defense segment rose 18% to 2.53 billion euros. Revenue for the aircraft interiors division jumped 27% to 771 million euros.

Despite the overall growth, Safran CEO Andries noted that narrowbody original equipment deliveries were constrained by supply chain challenges. He highlighted that aftermarket activities for engines and aircraft equipment contributed to a 17% increase in adjusted revenue over the first nine months.

In light of this performance, Safran revised its 2024 adjusted recurring operating income guidance upward to around 4.1 billion euros, compared to its previous target of nearly 4.0 billion euros.

However, the company trimmed its revenue outlook to approximately 27.1 billion euros from the prior forecast of 27.4 billion euros.

Jefferies analysts said they expect questions during the earnings call to focus on the impact of the current Boeing (NYSE:BA ) strike, particularly regarding Safran’s free cash flow (FCF).

“We also anticipate questions around the French tax impact, which could appear high to some investors,” they added.

Source: Investing.com