Dassault Aviation reported lower-than-expected annual profits on Wednesday, despite tight control of its R&D spending, and its forecasts for fiscal 2024 also disappointed the financial community.

The aerospace group's share price consequently fell by more than 5% in early trading on the Paris Bourse, posting the biggest drop in the SBF 120 index.

Its adjusted operating income reached 349 million euros last year, against 572 million euros in 2022, and compared with a consensus of 368 million euros.

Research and development (R&D) costs, however, were reduced to 483 million euros in 2023, compared with 572 million euros in 2022.

At 4.8 billion euros, compared with nearly seven billion euros in 2022, consolidated sales were also below market forecasts of 4.9 billion.

Adjusted net income reached a 'record' level of 886 million euros, compared with 830 million euros in 2022, thanks to the strong contribution of Thales to net income.

Falcon deliveries reached 26 units, compared with a forecast of 35 and a figure of 32 for 2022, while 13 Rafales (11 France and 2 Export) were delivered, compared with 15 forecast.

For 2024, the Group says it expects sales to be up on 2023, at around six billion euros, based on delivery targets of 35 Falcon and 20 Rafale.

We believe that this rather cautious outlook was broadly expected after another less-than-anticipated financial year, and in view of the continuing tensions in the supply chain", commented analysts at Oddo BHF in a reaction note this morning.

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