Airbus shares are back near this year's high -- but still look like a buy. EADSY data by YCharts.

It's been an amazing year for Airbus (NASDAQOTH:EADSY). All year long, and against all odds, Europe's top plane maker has thumped American arch rival Boeing (NYSE:BA) in the race to sell airplanes.

And now Airbus is beating Boeing in the race to grow profits as well.

Airbus's blockbuster year
Last month, Boeing reported strong earnings growth of 25% in its fiscal third quarter, with core earnings up an almost-as-impressive 18%. But the rest of the year's profits performance has been downright disappointing.

According to the latest tally from S&P Capital IQ, Boeing has earned $4.15 billion in profit so far this year. That's an impressive number, but it's actually only 4% better than year to date results at this time last year. Put another way, Boeing has posted just 4% year-over-year earnings growth for its first three quarters of fiscal 2015. But Airbus?

It's up 35%.

That was the headline number from Airbus's just-released fiscal Q3 (or as it calls it "9m") earnings report. Through the first nine months of fiscal 2015, Airbus has:

  • Grown revenues 6% year over year, to $47.1 billion.
  • Added another 40 basis points to its operating profit margin (now 6.8%).
  • Grown per-share earnings 35%, to $2.65 per share.
  • Increased the value of its plane order book by 42%.

The $122.6 billion worth of new orders Airbus has added so far this year exceeded revenues billed by 160% -- a "book-to-bill" ratio of 2.6. They leave Airbus's order book now overflowing with an incredible $1.06 trillion  in orders awaiting fulfillment -- enough work to keep Airbus factories humming for the next 15 years straight, even if it adds not a single new order in the interim.

What's next for Airbus?
Airbus does in fact expect to continue selling airplanes, of course. And as noted in its press release, "the strengthening U.S. dollar," and the relative weakening of the euro (which both lowers Airbus' costs, and makes its planes cheaper for international buyers), are both tailwinds helping to accelerate its sales. Meanwhile, to capitalize on its swelling backlog of orders to be fulfilled, the company has promised to continue acceleration production of its A320 line of aircraft, and eventually reaching a 60 planes-per-month production rate by mid-2019.

Nearer term, the company has reiterated earnings guidance that calls for "breakeven" free cash flow by year end, an "increase" in revenues, and an "increase further" in earnings (presumably on top of the earnings gains already booked in the year's first nine months).

Valuing Airbus
Such vague terms are difficult to hang a valuation on, but based on trailing-12-month earnings of $3.2 billion, Airbus shares currently sell for 17 times earnings. For comparison, Boeing shares sell for 18.6 times trailing earnings. Boeing's superior profitability on the planes it builds (8.3% operating profit margin for the past 12 months, versus Airbus's 4.3% margin) probably explains the small premium its share fetch on a P/E basis.

That said, if Airbus continues expanding its profit margins as it's done in recent quarters, and continues outselling Boeing as well, it's likely that the European airplane maker will grow its absolute level of profits faster than its rival. Currently, Capital IQ projects a near 15% long-term rate of annual profits growth for Airbus -- versus Boeing's growth rate of less than 11%.

This suggests that even if Boeing remains the more profitable plane builder, Airbus stock may make for the more profitable investment.