Boeing tops first-quarter profit forecasts, airplane deliveries rise
Boeing Co. delivered more commercial airliners in the first quarter, offsetting sluggish results in the defense side of its business and pushing its firstquarter earnings up 38 percent.
The profit topped Wall Street expectations, but revenue was below forecasts, and production costs of the Boeing 787 jet continued to pile up.
Boeing and European rival Airbus Group N.V. are benefiting as airlines use some of their record profits to buy new and more fuel-efficient jets. Boeing executives predict that increased travel, new routes and airline growth will bolster plane sales for years to come. They brush aside concern that falling oil prices could undercut demand or cause airlines to delay purchases.
“These remain very good times for our industry,” CEO Jim McNerney told analysts on a conference call. He said demand for planes is tightly related to airline profits, and lower oil prices since last summer have not changed the airlines’ plans to upgrade their fleets.
Boeing delivered 184 airliners in the quarter, up from 161 in the same period last year, with two-thirds of them for the venerable 737 jet, a workhorse on short and mid-range routes around the world.
Meanwhile, orders minus cancellations rose by a net of 110 in the quarter, and Boeing now has 5,700 orders on its books. About half are for an upcoming version of the 737. The backlog is valued at US$495 billion.
Boeing is still losing money on its innovative 787 passenger jet, made with a large share of lightweight carbon composites to save fuel. So-called deferred production costs rose another US$793 million, boosting the accumulated total to nearly US$27 billion. The company hopes to begin turning a profit on the plane soon, and the rate of losses slowed from both a year ago and last year’s fourth quarter.
Cowen and Co. analyst Cai von Rumohr called the 787-cost trend “very encouraging,” and Jefferies analyst Howard Rubel said the company “is starting to show good improvement in its produc- tion costs.”
The Chicago- based company said that net income rose to US$1.34 billion, or US$1.87 per share. Excluding US$113 million in pension expenses, the company said adjusted profit was US$1.97 per share — beating the US$1.81 per share forecast by analysts surveyed by Zacks Investment Research. A year earlier, adjusted profit was US$1.76 per share.
Revenue rose 8 percent to US$22.15 billion. That was short of the US$22.63 billion expected by six analysts surveyed by Zacks.
The company reaffirmed its forecast for full-year earnings in the range of US$8.20 to US$8.40 per share and revenue between US$94.5 billion and US$96.5 billion.
This Feb. 11, 2013 file photo shows a Boeing 787 jet taxiing following a test flight, at Boeing Field in Seattle.