Investing.com -- Shares in Safran plunged nearly 7% to a five-month intraday low of €281.20 on Friday after the French aerospace engine maker reported a sharp slowdown in third-quarter civil aftermarket growth and reiterated full-year guidance that falls short of market expectations.
Third-quarter revenue rose 14.7% to €9.003 billion (13.4% organically), in line with the company-compiled consensus of €8.99 billion, as defence demand offset the cooling aftermarket.
Civil engine spare parts sales rose 17% in dollars, compared with 29.3% in the first quarter and 26.7% in the second, helped by CFM56 pricing and better part availability.
Services revenue rose 19%, against 43.1% and 37.7%, mainly on growth in LEAP rate-per-flight-hour contracts.
Jefferies, which had forecast 20% for spare parts and 35% for services, said aftermarket momentum in Propulsion had softened. The broker rates Safran "hold" with a €340 price target.
Propulsion revenue was €4.63 billion versus €4.70 billion expected. Equipment and Defense came in at €3.62 billion versus €3.53 billion expected, and Aircraft Interiors at €751 million versus €761 million.
Defence demand drove Equipment and Defense growth of 15.7%, with original equipment sales up 16.2%.
"In defense, our activities are benefiting from robust market dynamics, and we are expanding our production capabilities to prepare for future growth," Chief Executive Olivier Andriès said.
Safran confirmed its 2026 guidance for mid-teens revenue growth, recurring operating income of €6.4 billion to €6.5 billion and free cash flow of €4.7 billion to €4.9 billion, including an estimated €500 million hit from the French corporate surtax.
Jefferies said the mid-points imply revenue 1.3% below consensus, operating income 2.1% below and free cash flow 1.8% below.
The outlook assumes LEAP deliveries up high-teens and spare parts and services revenue up mid-twenties in dollars.
LEAP deliveries were 535 in the quarter, up 5% from a year earlier. Military engine revenue fell, mainly on lower M88 deliveries reflecting the phasing of Rafale deliveries to export customers.
Safran completed a €375 million share buyback tranche on Oct. 20, taking 2026 repurchases to €1.25 billion.
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