Boeing ups earnings forecast, beats estimates

The Boeing Co., the world’s largest planemaker, boosted its full-year earnings forecast after second-quarter profit surged on higher aircraft deliveries and lower 787 Dreamliner production costs.

Earnings excluding some pension expense will be $6.20 to $6.40 a share in 2013, Boeing said today, up from a range of $6.10 to $6.30 in an April projection. Profit on that basis was $1.67 a share last quarter, topping the $1.58 average estimate of 20 analysts surveyed by Bloomberg.

Boeing is reaping rewards from a faster assembly pace for its 737s, 777s and 787s as a global aviation boom boosts demand for large jets. The planemaker shipped 169 commercial aircraft in the quarter, up 13 percent from a year earlier, including 16 Dreamliners delivered after regulators cleared the plane to fly in April. Boeing handed over six 787s a year earlier.

“The 787 program has been progressing well through production after a very difficult launch,” Douglas Harned, an aerospace analyst with Sanford C. Bernstein &Co. in New York, said in a July 19 research note. “Progress on cost reduction also appears to be going well.”

Boeing shares rose 1.8 percent to $109.70 at 7:42 a.m. before regular New York trading.

Revenue rose 9 percent to $21.8 billion as Boeing delivered more higher-margin 777 and 737 jets than a year earlier and its defense unit landed international business to help blunt the impact of U.S. budget cuts. Analysts had predicted sales of $20.8 billion.

Pension Expenses

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 fluctuations in pension expenses. Without the adjustment, net income was $1.09 billion, or $1.41 a share, compared with $967 million, or $1.27, a year earlier.

Boeing’s incremental manufacturing costs for each 787 continue to drop as it smoothes out production kinks and gains sales, falling to $73 million each in the first quarter from $103 million in the previous quarter, Carter Copeland, a Barclays analyst in New York, wrote in a July 22 report. He expected deferred development costs to decline to $60 million a jet in the second quarter, boosting free cash flow.

The latest setback for the program, a July 12 fire aboard a Dreamliner parked at London’s Heathrow airport, “shouldn’t have a material impact on Boeing’s valuation,” Harned said.

Investigators are focused on an “off-the-shelf” emergency beacon rather than a new 787 technology, raising the likelihood the incident is a “one-off” issue costing tens or hundreds of millions of dollars, rather than billions, he said.

The global fleet was grounded for three months this year to fix lithium-ion battery meltdowns.

More in Herald Business Journal

Everett engineers learn lessons from Mexico City catastrophe

Structural scientists went to help after the September earthquake there and studied the damage.

DaVita to sell off medical groups including The Everett Clinic

Another round of health care consolidation means The Everett Clinic could soon get new ownership.

Engine trouble hits Air New Zealand’s 787 Dreamliners

A Rolls-Royce engine was shut down and was afterward found to be seriously damaged.

Washington, Amazon sue company over seller training programs

Braintree is accused of using deceptive ads promising information on how to make money on Amazon.

The Marine Corps’ version of the F-35 Joint Strike Fighter is designed to land vertically like a helicopter. (Lockheed Martin)
F-35 fighter costs, $1 trillion over 60 years, draw scrutiny

Pentagon’s ability to repair F-35 parts at military depots is six years behind schedule.

Incidents of severe disturbances on commercial flights climb

The number of cases in which the cabin crew had to restrain a passenger rose to 169 last year.

Funko mascots Freddy Funko roll past on a conveyor belt in the Pop! Factory of the company’s new flagship store on Aug. 18, 2017. (Dan Bates / The Herald)
Funko starts to bounce back after disappointing stock debut

The Everett toys-and-collectibles maker also announced the acquisition of an animation studio.

Now hiring: Younger factory workers, at Boeing and elsewhere

The company and its training partners are fighting perceptions of a dying manufacturing industry.

‘The President Stole Your Land’: Patagonia, REI blast Trump

The outdoor recreation industry is allied with Indian tribes and conservationists.

Most Read