By Tess Stynes
Boeing Co. said its first-quarter earnings fell 13% as costs
tied to changes to its retirement plans masked the continued strong
demand for its jetliners.
Shares edged up about 2% premarket as the results beat
expectations and the company raised its earnings guidance.
The latest period included previously disclosed charges of about
$330 million related to Boeing's plans to move most of its workers
to 401(k) retirement-savings plans from traditional pension plans
starting in 2016. A growing number of U.S. companies have swapped
traditional pensions for 401(k) plans, effectively shifting the
risk of market volatility to workers and reducing long-term costs.
The year-earlier period included a one-time tax benefit.
The company raised its per-share earnings estimate for the year
to $7.15 to $7.35, from its previous estimate for $7 to $7.20 to
reflect a tax settlement. It backed its revenue view.
Demand for commercial aircraft remains strong as airlines expand
their fleets and replace older planes with fuel-efficient models.
The aerospace and defense giant delivered a record 648 commercial
aircraft in 2013 and expects to top that this year. The company,
which has boosted production, affirmed its guidance for this year's
deliveries at between 715 and 725 airplanes.
In the latest quarter, revenue at its commercial division rose
19%, while operating earnings increased 23%. The company delivered
161 jets, compared with 137 a year earlier.
Boeing's defense, space and security division reported weaker
results amid tight defense spending. Revenue declined 5.9%, while
operating earnings fell 6.5%.
Boeing reported a profit of $965 million, or $1.28 a share, down
from $1.11 billion, or $1.44 a share, a year earlier. Core
operating earnings, which adjust to excluding pension-components
related to market fluctuations and other items, rose to $1.76 from
$1.73. Revenue increased 8.3% to $20.47 billion.
Analysts polled by Thomson Reuters expected a per-share profit
of $1.56 and revenue of $20.2 billion.
Operating margin fell to 7.5% from 8.1%.
Write to Tess Stynes at tess.stynes@wsj.com
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