Safran sales rise, but aftermarket concerns knock shares

Safran Q3 Revenue Rises 13.4%, Aftermarket Uncertainty Impacts Shares

Safran's Third-Quarter Performance and Market Outlook

By Florence Loeve and Joanna Plucinska

PARIS/LONDON, Oct 23 (Reuters) - French jet engine maker Safran reported higher third-quarter revenue on Friday, driven by growth in its core engine business, and reaffirmed its 2026 outlook.

Still, the stock dropped 6% in early trade as investors worried a slowdown in aftermarket sales growth could continue into 2027 as airlines cut capacity amid high fuel prices.

One of the world's largest aerospace equipment suppliers, Safran said quarterly sales rose 13.4% on an organic basis to €9 billion ($10.1 billion), in line with analysts' average forecast in a company-compiled consensus.

Safran raised its full-year targets in July after reporting stronger-than-expected first-half profit, helped by robust demand for spare parts.

Aftermarket Projections and Performance

AFTERMARKET PROJECTIONS

Propulsion Division and Aftermarket Revenue

Safran's propulsion division, which accounted for about half of group revenue in 2025, posted organic sales growth of 13.2% in the quarter, while aftermarket revenue rose 18.7%.

Jefferies analysts said propulsion aftermarket growth had slowed and fell short of expectations.

CEO Response and Analyst Forecasts

Chief Executive Olivier Andries dismissed concerns that demand for spare parts was weakening.

"We are still growing," he told journalists on a media call, adding that full-year spare-parts growth was expected to be about 25% from the previous year.

Analysts continue to see strong long-term growth in the aftermarket business, with JPMorgan forecasting sales will increase sixfold between 2024 and 2040.

US engine maker GE Aerospace on Tuesday raised its 2026 profit forecast for the second time this year, citing strong demand for engine maintenance and spare parts.

Equipment and Defence Division Results

Safran's Equipment and Defence division generated €3.6 billion in quarterly revenue, above analysts' expectations of €3.5 billion.

Defence Growth and Strategic Initiatives

DEFENCE GROWTH 

Revenue Projections and Expansion

Andries said defence demand was booming and that Safran expected revenue from the sector to double between 2025 and 2030.

"We expect a growth rate of 20% per year, which is very significant," he told reporters. 

He added that Safran was opening an assembly line in Texas for missile engines and expected to double production.

Andries also said work carried out on the collapsed FCAS fighter jet programme would be transferred to France's Future Combat Aircraft programme.

Additional Information

($1 = 0.8921 euros)

(Reporting by Florence Loève and Joanna Plucinska. Editing by Jochelle Mendonca and Mark Potter)