By Pierre Bertrand

MTU Aero Engines shares fell after the company's cash generation missed market views, overshadowing its lifted outlook for the year ahead.

In midday European trading, shares were down 5.7% at 326.40 euros.

The German aircraft-engine manufacturer missed analysts' expectations of adjusted cash generation for the fourth quarter of 2024, posting an outflow of 30 million euros ($31.3 million) compared with the 45 million euros of inflows anticipated in a company-compiled consensus. For the full year, adjusted cash flow fell 48% to 183 million euros, missing expectations of 253 million euros.

"Free cash flow was mainly affected by the geared turbofan fleet management plan and ongoing supply-chain volatility," Chief Financial Officer Peter Kameritsch said.

MTU supplies key components for geared-turbofan engines that power planes such as Airbus's A320neo. Hundreds of these engines were recalled in 2023 for inspections due to a fault that could lead to metal cracking. MTU said at the time it would initiate measures to limit the effect of the issues stemming from the engine trouble.

However, MTU raised its revenue guidance for 2025, aiming at between 8.7 billion and 8.9 billion euros compared with a previous target of between 8.3 billion and 8.5 billion euros.

Adjusted earnings before interest and taxes--its preferred measure of profitability--are expected to rise by a mid-teen percentage compared with its previously forecast low to mid-teens range. The company maintained its forecast of adjusted cash flow in the low three-digit million euros.

MTU posted record revenue and earnings for 2024, with earnings rising across the whole of the business, a trend it expects to continue in 2025.

"We are seeing robust earnings growth across the board," MTU Aero Engines Chief Executive Lars Wagner said.

Adjusted EBIT for the fourth quarter rose to 307 million euros from 221 million euros a year earlier, and increased by 28% for the year. Analysts had forecast quarterly earnings of 290 million euros, according to the consensus.

Three-month revenue rose to 2.125 billion euros from 1.71 billion euros, and rose 38% over the course of the year.

Write to Pierre Bertrand at pierre.bertrand@wsj.com

(END) Dow Jones Newswires

February 19, 2025 06:27 ET (11:27 GMT)

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