Boeing Q1 profit beats expectations despite 787 woes

The Boeing Co.’s first-quarter profit rose 5.3 percent and beat analysts’ estimates as increased deliveries for 777- and 737-model jets made up for the halt in buyers picking up Dreamliners while that plane was grounded.

“Commercial Airplanes worked around the clock to resolve the 787 battery issue while also successfully increasing production rates on the 737 and 777 programs,” Jim McNerney, Boeing CEO, said in a statement.

Profit excluding some pension expenses was $1.87 billion, or $1.73 a share, compared with $1.77 billion, or $1.40, a year earlier, the Chicago-based company said today in a statement. Analysts projected $1.49 a share on that basis, the average of 18 estimates compiled by Bloomberg.

Boeing delivered four more 777s and three more 737s in the quarter than a year earlier, making up for the pause in handing over 787 Dreamliners, which are less profitable in part because the program is new. The world’s largest planemaker shipped 137 commercial aircraft, matching the year-earlier tally.

“Boeing benefited from a better mix in deliveries,” said Ken Herbert, a San Francisco-based analyst with Imperial Capital LLC, in a telephone interview before the release. “Delivering those higher-margin, more-mature programs — the 737 and the 777 — was incrementally positive to the bottom line.”

Revenue fell 2.5 percent to $18.9 billion because of the drop in 787 deliveries and the effect of U.S. budget cuts on Boeing’s defense business. Analysts had predicted revenue of $18.8 billion.

Pension Expense

Since January, Boeing has used a profit measure — so- called core earnings per share — that it said gives a clearer picture by adjusting for market fluctuation in pension expenses. Without the adjustment, net income was $1.11 billion, or $1.44 a share, compared with $923 million, or $1.22, a year earlier.

The company today reaffirmed its 2013 forecast of core EPS of $6.10 to $6.30.

Boeing delivered only one Dreamliner in this year’s first three months, down from 23 in the previous quarter, after the Federal Aviation Administration grounded the plane on Jan. 16. Shipments stopped while production continued.

The FAA approved Boeing’s changes to the 787’s lithium-ion battery system to improve safety on April 19, paving the way for Dreamliner flights and deliveries to resume. The company has deployed about 300 people to install the new battery systems, which takes about five days on each plane.

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