Boeing Profit Falls as Commercial Deliveries Lag
April 27 2016 - 8:40AM
Dow Jones News
Boeing Co. said its first-quarter profit fell as the aircraft
maker delivered fewer commercial jets.
Despite the decline in earnings and sales miss, the company
backed its full-year guidance. "We are pleased with out performance
trends and our outlook for the year remains positive," said Chief
Executive Dennis Muilenburg.
Chicago-based Boeing, the world's largest aerospace company, has
delivered strong earnings in recent years, driven largely by
booming demand for commercial jets. But earlier this year, the
company issued an outlook for this year that fell well short of
expectations. Boeing said it would deliver 740 to 745 commercial
aircraft in 2016, down from the record-high 762 last year.
Meanwhile, the company has been accelerating its move into the
parts business as part of its broader effort to cut costs and
secure a new, lucrative source of revenue.
In the latest quarter, the company delivered 176 commercial
planes, down 4.3% from a year earlier. In turn, revenue in Boeing's
commercial segment declined 6.4% to $14.4 billion. Boeing added
that it began major assembly of its 787-10 ahead of schedule and
said backlog at the end of the quarter was valued at $424
billion.
Higher deliveries of military aircraft helped offset the softer
commercial business. Revenue from military aircraft rose by about a
third, thanks to higher F-15 and C-17 deliveries. Rivals military
contractors have similarly reported improved business in the first
quarter. On Wednesday, Northrop Grumman and L-3 topped expectations
and raised guidance, while Lockheed Martin did the same on
Tuesday.
In all for the quarter, Boeing reported a profit of $1.22
billion, or $1.83 a share, down from $1.34 billion, or $1.87 a
share, a year earlier. Excluding a charge related to the company's
tanker program, among other items, adjusted earnings per share fell
to $1.74 from $1.97.
Revenue edged 2.2% higher to $22.63 billion. Analysts had
projected $1.82 in adjusted earnings per share on $21.44 billion in
sales, according to Thomson Reuters.
For the year, Boeing affirmed its forecast for adjusted earnings
of between $8.15 and $8.35 a share. Boeing still predicts 2016
revenue of between $93 billion and $95 billion.
Shares in the company, down 7.9% this year through Tuesday's
close, slipped 1.3% in premarket trading.
Write to Lisa Beilfuss at lisa.beilfuss@wsj.com
(END) Dow Jones Newswires
April 27, 2016 08:25 ET (12:25 GMT)
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