BA Boeing Co

By Doug Cameron and Anne Steele 

Boeing Co. on Wednesday reported forecast-beating third quarter profit and boosted its full-year guidance after a tax gain, but said commercial jet order activity was moderating.

Boeing Chief Executive Dennis Muilenburg said on a call with analysts Wednesday that the aircraft maker will decide in the next two months whether to cut output of its 777 passenger jet and is considering a trim of one or two jets a month from its existing plan.

Mr. Muilenburg said Boeing still plans to produce seven of the jets a month next year and is 85% sold out at that rate. So far, it has orders for 60% of that output in 2018. He said any cut would take place in late 2017 or early 2018.

Boeing still plans to boost output of the 737 and demand outstrips even the peak of the 57 planes a month it expects to build in 2019, he said.

Boeing also raised the top end of its jet delivery forecast by five planes to 750 and reported higher profits on its 787 Dreamliner.

However, the company left its cash flow guidance for the year unchanged and slowed stock buyback activity, and an advance in the shares before the open reversed to leave them recently down 0.7% at $138.04.

Boeing's accounting profit on the 787 has swung about $20 million over the past year, giving it a $4.2 million surplus on each jet delivered in the latest quarter, estimates Jefferies. The deferred production balance on the 787 fell $150 million to $27.52 billion over the latest quarter.

Group revenue is now expected to come at $93.5 billion to $95.5 billion, compared with previous guidance for $93 billion to $95 billion, on higher aircraft deliveries. The company also sees full-year adjusted per-share earnings between $6.80 and $7 a share, up from its previous guidance for $6.10 and $6.30, due to a 70-cent per-share tax adjustment.

Mr. Muilenberg said the company hit key milestones on the 737 Max, 787-10 and other development programs, including the first KC-46 production contract. Boeing forecast modest growth in U.S. military spending and healthy overseas demand.

Boeing reported a third-quarter profit of $2.28 billion, or $3.60 a share, up from a year-earlier's $1.7 billion, or $2.47 a share. Excluding items, the company earned an adjusted profit of $3.51 a share when factoring in the 70-cent tax benefit. Factoring out the benefit, profit still topped analysts' estimates for $2.62 a share, according to Thomson Reuters.

Revenue slipped 7.5% to $23.9 billion, edging in above the $23.64 billion in sales analysts were looking for.

Write to Doug Cameron at doug.cameron@wsj.com and Anne Steele at Anne.Steele@wsj.com

(END) Dow Jones Newswires

October 26, 2016 11:10 ET (15:10 GMT)

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