French aerospace supplier Safran reported €9.003 billion in adjusted third-quarter revenue, an increase of 14.7% from a year earlier, as aircraft production and aftermarket demand continued supporting growth.
Organic revenue increased 13.4%.
Propulsion revenue increased 13.2% organically, with aftermarket activity rising 18.7%.
Safran delivered 535 LEAP engines during the quarter, 5% more than a year earlier, as improving supply-chain conditions helped the company increase production.
Equipment and defense revenue grew 15.7% organically, supported by demand for systems including AASM Hammer products, optronics, navigation equipment and missile seekers.
Investors, however, focused on the civil-engine aftermarket.
Spare-parts sales increased 17% in dollar terms during the quarter. While still strong, the pace represented a moderation that contributed to concerns about the future trajectory of one of Safran’s most profitable operations. The company’s shares fell following the results.
Safran maintained its full-year outlook.
The company expects mid-teens revenue growth, recurring operating income between €6.4 billion and €6.5 billion and free cash flow of €4.7 billion to €4.9 billion.
The results illustrate the unusual position of the aerospace industry.
Aircraft demand remains strong and airlines continue spending heavily to maintain existing fleets, but high investor expectations mean even a moderation in aftermarket growth can pressure valuations.
The next indicators will be LEAP production and whether airline maintenance spending remains resilient as carriers confront higher operating costs.
