By MICHAEL J. MARTINEZ
SEATTLE — Third-quarter earnings at The Boeing Co. rose 28 percent as the aerospace manufacturer beat Wall Street estimates despite a drop in revenues.
For the three months ended Sept. 30, company officials said today, Boeing earned $609 million, or 70 cents per share, on sales of $11.88 billion. That compares with $477 million, or 52 cents per share, on sales of $13.28 billion in the same quarter a year ago.
Excluding non-recurring items, Boeing earned 72 cents per share for the quarter, up from 56 cents a year ago.
Analysts surveyed by First Call/Thomson Financial were expecting earnings of 67 cents per share.
"It’s about performance, program execution, cash flow and tapping new opportunities," said Phil Condit, Boeing’s chairman and chief executive. "I have to tell you, I am pleased with our team’s performance."
Despite beating expectations, shares of Boeing fell $1.50 to $59 on the New York Stock Exchange in a turbulent day on the stock market.
Though revenues dropped 10.6 percent from a year ago, mostly due to slower sales of commercial jets, Boeing continued to make its operations more efficient. Despite the sales shortfall, quarterly earnings in its commercial airplane division rose from $534 million to $739 million.
"Our delivery expectations are good and our outlook remains strong," Condit said of the commercial unit. "We are expecting double-digit (operating) margins by the end of 2001, two years ahead of schedule."
The company’s military aircraft and missiles division was even more impressive, with revenues growing by $134 million, or 4.8 percent, while profits more than tripled — from $102 million in the third quarter last year to $374 million this year.
One of the few disappointments was in Boeing’s space and communications division, where the company posted an operating loss of $14 million. In the third quarter of last year, the unit posted profits of $137 million. Company officials blamed increased research and development spending for the new Delta IV rocket and its airborne satellite-based Internet program.
Boeing also took a one-time charge on its "demonstration" launch of the Delta III rocket, which had twice failed earlier this year. The company launched a Delta III in August with a dummy payload, eating the cost of the launch to prove the rocket works.
Looking ahead to 2001, Condit said the company expected even higher revenues than previously anticipated, along with increased profit margins.
For the first nine months of the year, Boeing earned $1.76 billion, or $2.02 per share, on sales of $36.6 billion. In the year-ago period, Boeing earned $1.74 billion, or $1.86 per share, on sales of $42.8 billion.
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