Safran Stock Performance

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

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

Revenue Breakdown

• Propulsion Segment: 8.3% year-over-year increase, reaching €3.34 billion in revenue.
• Equipment and Defense Segment: Rose 18% to €2.53 billion.
• Aircraft Interiors Division: Jumped 27% to €771 million.

Despite the overall growth, CEO Andries noted that narrowbody original equipment deliveries were constrained by supply chain challenges. He emphasized 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, compared to its previous target of nearly €4.0 billion. However, the company trimmed its revenue outlook to approximately €27.1 billion, down from the prior forecast of €27.4 billion.

Analyst Insights

Jefferies analysts 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). They also anticipate inquiries regarding the French tax impact, which could appear high to some investors.