Airbus (EADSY) shares edged higher Thursday as CEO Tom Enders issued a stern rebuttal to authorities in Austria investigating the group for fraud linked to a 2003 fighter jet deal.
Enders called the probe, unveiled Wednesday and first reported by Reuters, "a politically-motivated abuse of the legal system" and said the accusations were "unfounded and unsubstantiated"."
Shares in Airbus were marked 0.62% higher in Paris, after falling as much as 3% earlier in the session after the planmaker posted weaker-than-expected first quarter earnings thanks in part to rising costs. It also missed delivery targets for passenger planes due to ongoing problems with some engines. The stock was last seen changing hands at €74.50 against a 0.21% decline for the broader Stoxx Europe 600 benchmark.
The world's No.2 aircraft maker, behind Boeing (BA - Get Report) , posted adjusted operating profit of €240 million ($262 million), missing analyst expectations of about €344 million, despite increasing revenues by about 7% to €12.9 billion.
Enders went on the offensive Thursday after Austrian investigators confirmed they were looking into the roles of individuals, including Enders' role, relating to a $2 billion deal for Eurofighter planes. Vienna-based prosecutors opened a criminal invesitgation into the deal in February, following allegations by the Austrian defense ministry that it had been misled about the cost, equipment and deliverability of the planes. Enders was head of Airbus's defence division when the contract was signed.The German CEO was less ruffled by his company's quarterly performance, commenting that the results didn't "offer any big surprises," and insisted his company was on track to meet both its earnings and free cash flow targets for 2017.
Hitting those targets will require Airbus to accelerate output over the coming three quarters after it fell behind on plans to deliver more than 700 jets this year due to problems with the engines in its single-aisle A320neo jets.
Airbus is due to ship 200 of the new A320neo planes this year, but saw only 26 roll off the line in the first quarter after engine provider Pratt & Whitney, a unit of United Technologies, was forced to replace faulty engines on some delivered aircraft, leaving Airbus short of engines for new planes.
"Customers are experiencing a number of in-service issues which need to be resolved, in particular with the Pratt & Whitney GTF engine," Airbus said in a statement. The Toulouse, France-based plane maker said it expected to make up the output shortfall in the second half.
Commercial aircraft core earnings fell 31% over the first quarter to €281 million despite a 13% increase in sales to €9.83 billion. Airbus said the earnings dip was due an increase in sales of its new A350 model. New airplanes tend to be sold at a deeper discount to encourage adoption, while costs are often front-loaded as the cost of transforming production lines is absorbed.
Airbus's helicopter unit lost €2 million over the quarter, down from a €33 million profit last year, partly due to increased demand for less profitable models and the ongoing grounding of its H225 Super Puma helicopter in the UK and Norway following a crash last year.
On Wednesday, Boeing reported a 19% increase in first-quarter profit due to cost cutting that offset a 7.3% decline in revenues.