Jet output lifts Boeing’s 3Q profit
Company reports 25% jump, raises outlook for 2015
NEW YORK — Faster production of commercial jets continues to drive profits at Boeing Co., which reported earnings that jumped 25 percent in the third quarter. It also raised its earnings outlook for the year.
The Chicago-based company on Wednesday posted a $1.7 billion net profit, up from $1.36 billion during the same period last year.
Boeing said it earned $2.47 per share. Earnings excluding certain pension expenses were $2.52 per share. The results topped Wall Street expectations. The average estimate of nine analysts surveyed by Zacks Investment Research was for earnings of $2.22 per share.
Commercial jet manufacturing is playing a larger role at Boeing, also known for its military and space programs. Payments from the delivery of new jets to airlines accounted for 68 percent of Boeing’s $25.85 billion in revenue. That also beat Wall Street’s estimates; analysts surveyed by Zacks expected $24.74 billion.
In July, August and September, the aerospace company delivered 199 commercial jets, up from 186 during the same quarter last year. And more of those jets are expensive wide-bodies, such as the 787 Dreamliner. During the third quarter last year, 31 Dreamliners were delivered to airlines; this year, Boeing delivered 37.
The challenge now for Boeing is to bring down the production cost of the Dreamliner so it can bring in more cash and break even on the plane, for which development costs ran over budget.
The company raised its outlook for the year by 5 cents a share. Boeing now expects full-year earnings to be between $7.65 and $7.85 a share.
Boeing still has a record backlog of new jet orders: nearly 5,700 valued at $426 billion. However, lower fuel prices, a slowing global economy and the possible end of low interest rates has led some analysts to question how much longer the plane-buying spree will continue and whether all of those orders will eventually be delivered.
Last week, Delta Air Lines Chief Executive Officer Richard Anderson said a large number of wide-body jets coming off lease in the near future is creating an “aircraft bubble.” He predicted that airlines like his would be able to buy the used jets cheaply, which would drive down demand — and prices — for the
newer and more fuel-efficient models that Boeing and European rival Airbus are selling.
Boeing CEO Dennis Muilenburg defended new jet sales on a call with investors and Wall Street analysts, saying, “We continue to see a growing, healthy market.”
Boeing Co. shares were up $2.31 to $141.19 in trading Wednesday on the New York Stock Exchange. Its shares have risen about 6 percent so far this year.