Boeing beats 2Q profit forecasts, raises full-year outlook
Boeing reported higherthan-expected earnings for the second quarter despite lower revenue, and it raised its forecast for full-year profit on Wednesday, sending both the aircraft maker’s stock and the Dow higher.
The company is benefiting as profitable airlines continue to order new planes. With a backlog of orders approaching a half trillion dollars, Boeing said that it will buy back $10 billion of its own stock this year, making the remaining shares more valuable, and reduce its taxes by paying down its pension liability.
The shares jumped $20.99, or 9.9 per cent, to close at $233.45. It was the stock’s biggest oneday gain in percentage terms since October 2008.
The Boeing bump added nearly 144 points to the Dow Jones industrial average, lifting it to 21,711. Boeing said its backlog grew to $482 billion at the end of June, including $27 billion in new net orders during the second quarter. Nearly 90 per cent of that value is from the backlog of more than 5,700 commercial airliners, with Boeing’s defence business accounting for the rest.
The Chicago company and European rival Airbus figure to benefit for years to come from growing demand for travel and the planes that will be needed to carry passengers around the world, although manufacturers in China, Japan and Russia aim to become bigger players too.
Boeing is gearing up to increase production of its most popular airliner, the single-aisle 737 that is a mainstay on short and medium-haul routes. Demand for so-called widebody, two-aisle planes that are used on many international routes is not as strong.
The company cut 6,500 jobs in the first half of this year, and it is making progress at controlling production costs for its 787 “Dreamliner” plane.