By Doug Cameron and Robert Wall 

The world's two largest plane makers laid out divergent goals Wednesday as Boeing Co. chases fresh sales while Airbus Group SE needs to push more jets out of its factories.

Both companies are under pressure from investors fretting about the resilience of combined order books totaling 10,000 jets and valued at more than $1.5 trillion, though few deals have been canceled.

Boeing Chief Executive Dennis Muilenburg said the company, which reported forecast-beating third-quarter profit, is still committed to its goal of boosting margins to around 15% by the end of the decade from around 10% now.

But it needs to find fresh deals for its widebody jets, especially the 777. Sales of twin-aisle planes that typically have higher profit margins have been sluggish this year as airlines in Asia and the Middle East dialed back on expansion plans.

Boeing has won fresh orders for just 26 of its existing 777 jets this year to push the backlog over 150.

Mr. Muilenburg said 777 output could be cut to 42 a year in 2018 after already announcing a trim to 66, unless it closes some key sales campaigns in the next two months. It currently makes 100 a year. A decision on boosting production of the smaller 787 jet hinges on gaining additional deals in the next six months, he said.

The profitability of both jets is crucial to Boeing's long-term plan and the company still expects to generate around $10 billion in cash in 2016 and increase this in later years, Mr. Muilenburg said.

Boeing shares reversed an early loss Wednesday and were recently up 4.1% at $144.78 after hitting their highest level this year.

Deals for single-aisle jets have been far more robust. Boeing still plans to boost output of the 737, and demand outstrips even the peak of the 57 planes a month it expects to build in 2019, Mr. Muilenburg said.

Meanwhile, production at Toulouse, France-based Airbus has been hobbled by delays in securing seats and engines for some jets. The company needs to overcome these to deliver on pledges to investors.

Airbus on Wednesday said it would push more than 208 planes out the door in the fourth quarter, an unusually large number, including almost doubling delivery of its new A350 long-range jet. To meet its profit goals, Airbus plans to ship more than 670 jetliners this year, at least 20 more than initially promised. Boeing aims to deliver as many as 750 planes in total this year

Airbus needs to get those planes into customer hands to generate more than 5 billion euros (about $5.5 billion) in cash in the last three months of the year. It has committed to generated generate about EUR1.2 billion in cash this year and ended the third quarter with about EUR4.7 billion in cash out the door.

"For the remaining months of the year we remain totally focused on deliveries to achieve our earnings and cash guidance," said Airbus Chief Executive Tom Enders.

Airbus investors have been anxious that delays on the A350 and an updated version of the company's popular single-aisle plane, called the A320neo, would cause earnings to fall short.

The company reported a 21% drop in its closely watched adjusted earnings measure to EUR731 million. Net income in the period plummeted 87%, to EUR50 million from EUR736 million, which Airbus attributed to a higher effective tax rate.

Airbus shares rose 3.8% to EUR55.40.

Boeing's third-quarter profit rose to $2.28 billion from $1.7 billion, with per-share earnings climbing to $3.60 from $2.47. A tax gain outweighed a charge on a space taxi being developed for the National Aeronautics and Space Administration. Revenue slipped 7.5% to $23.9 billion, and though Boeing boosted its full-year guidance slightly, sales are expected to be flat or slightly down in 2017.

Write to Doug Cameron at doug.cameron@wsj.com and Robert Wall at robert.wall@wsj.com

 

(END) Dow Jones Newswires

October 26, 2016 15:34 ET (19:34 GMT)

Copyright (c) 2016 Dow Jones & Company, Inc.
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