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Boeing Boosts 2014 Profit Forecast After Strong Q2

Jul. 23, 2014 - 08:11PM   |  
FAA Grounds U.S. Boeing 787's After String Of Malf
(David McNew / Getty Images)
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WASHINGTON — US aerospace and defense giant Boeing on Wednesday raised its full-year profit forecast after earnings soared 52 percent in the second quarter, lifted by increased jetliner deliveries.

Boeing posted net profit of $1.65 billion for the April-June quarter, up from $1.09 billion in the year-ago quarter.

Core earnings per share rose 45 percent to $2.42, widely topping the $2.01 expected by analysts.

The company delivered 181 jetliners in the second quarter, a solid 7.1 percent increase from 169 aircraft a year earlier amid robust demand from airlines.

Boeing raised its 2014 full-year forecast to core earnings per share between $7.90 and $8.10, from $7.15 to $7.35, citing in part its “positive market outlook.”

The improved earnings outlook, with a midpoint of $8.00, beat market estimates of $7.67. The Chicago-based company had also raised its profit forecast at the end of the first quarter.

Despite beating profit expectations, shares in Dow component Boeing tumbled 2.3 percent to $126.70 in morning trade.

“Strong operating performance across our production programs and services businesses drove revenue and earnings-per-share growth and healthy operating cash flow,” Boeing’s chairman and chief executive Jim McNerney said in a statement.

“With 783 new commercial airplane orders to date this year and significant contracts in the quarter for military aircraft and satellites, our backlog remains large and diverse.”

The Chicago-based company also had hiked its 2014 profit forecast at the end of the first quarter.

Higher Global Demand

Boeing earlier this month raised its 20-year forecast for global jetliner demand by 12.5 percent, to $4.5 trillion, assuming that airline traffic would grow by five percent each year.

During the second quarter, Boeing’s commercial aircraft division booked 264 net orders, bringing the orders backlog to 5,200 airplanes, valued at a record $377 billion.

Boeing had a net 499 new orders for the first half of the year, outpacing European rival Airbus’s 290 orders. Boeing also was ahead in deliveries, at 342, compared with 303 for Airbus.

Leading Boeing’s second-quarter deliveries was the best-selling single-aisle 737 aircraft, with 124 deliveries. Next were 30 deliveries of the new 787 Dreamliner, the high-tech plane that was grounded globally for more than three months last year due to lithium-ion battery problems.

Boeing reiterated that it expected to deliver between 715 and 725 jetliners this year, after a record 648 deliveries in 2013.

In July, Emirates and Qatar Airways finalized orders totaling 200 777X airplanes, and British low-cost carrier Monarch Airlines committed to buy 30 737 MAX planes.

Revenues at Boeing, the world’s largest aerospace company, rose one percent to $22.05 billion, missing estimates of $22.23 billion.

The commercial aircraft division scored a 5 percent rise in revenues, to $14.30 billion.

Revenues at the smaller defense, space and security division fell 5.4 percent to $7.75 billion, reflecting lower US defense spending in the wake of budget cuts.

The second-quarter results included a $272 million after-tax charge to reflect additional work on the KC-46A Tanker program for the US Air Force, and a total of $524 million in tax benefits.

Boeing said it repurchased 11.4 million shares for $1.5 billion during the second quarter and raised its dividend payments by about 50 percent.

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