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

Voters are on the sidelines as the port fills a vacant seat

Troy McClelland resigned from the Port of Everett commission too late for an election before 2019.

In space capsules today, little room but big improvement

Boeing and SpaceX are relying on a tried-and-true design as they each develop new spacecraft.

First Boeing KC-46 delivery to Air Force slides into 2018

Certification milestones have been missed, and problems have emerged in flight test, a source says.

Newest must-try eatery: 85°C Bakery Cafe in Lynnwood

The popular bakery, part of a Taiwan-based chain, is already drawing out-the-door crowds.

Snohomish County tax liens

Tax liens are gathered from online public records filed with the Snohomish… Continue reading

Trudeau: Canada could stop dealing with Boeing over dispute

Boeing had petitioned the U.S. to investigate government subsidies of Bombardier’s CSeries aircraft.

Toys ‘R’ Us files for bankruptcy but keeps stores open

Retailers of all kinds are struggling. Toys ‘R’ Us is among at least 18 other bankruptcies this year.

Marysville-Arlington fiber-optic link planned by Comcast

The high-speed internet line, to be ready next year, is seen as a boost for business development.

‘Cheese that was grass 24 hours ago’ wins a farm accolades

Ferndale Farmstead specializes in authentic Italian cheeses — made with with American milk.

Most Read