Boeing lifts profit outlook as jetliner demand soarsWednesday 23 April 2014 14.29
US aerospace and defence giant Boeing raised its 2014 profit outlook despite a first-quarter profit slide, citing strong demand for its new jetliners.
A sharp rise in pension costs from a change in retirement plans offset Boeing's robust commercial aircraft deliveries as airlines seek to renew aging fleets with more fuel-efficient jetliners.
Boeing posted net profit in the first quarter of $965m, a decline of 12.7% from the same time last year, but which was still better than analysts expected. It said it took a $334m charge for retirement plan changes.
Core earnings per share came in at $1.76, three cents higher than a year ago and well above the $1.56 estimate.
Boeing reported an 8.3% rise in revenues to $20.47 billion, and operating cash flow soared 112% to $1.1 billion.
The Chicago-based company raised its 2014 profit forecast to between $7.15 and $7.35 per share, from $7 to $7.20, to reflect a tax settlement. It confirmed its outlook for revenue, operating cash flow and deliveries.
"Our outlook for the full year remains positive on the strength of demand for our fuel-efficient new commercial airplanes, our solid position in global defense, space and security markets" and the company's focus on improving financial and operational strength, said Boeing chairman and chief executive Jim McNerney.
The company returned more than $3 billion to shareholders during the quarter through its share repurchase programme and dividends.
Its commercial aircraft revenues climbed 19% to $12.74 billion on higher deliveries of two of its best-selling models - the 787 Dreamliner and the 737 - after the company boosted production rates to cope with surging demand.
Boeing Commercial Airplanes booked 235 net orders during the first quarter, which ended with a backlog of more than 5,1000 airplanes valued at $374 billion.
The company said it expects to deliver between 715 and 725 jetliners this year.
But the smaller Defence, Space and Security segment saw revenues fall 5.9% to $7.63 billion, amid a sharp drop in military aircraft revenue.
At the end of the quarter on March 31, Boeing had a cash pile of $12.2 billion, down from $15.3 billion at the beginning of the year.
The decline was mostly due to the share repurchases and the pay-down of maturing debt, it said. Debt was $8.9 billion, down from $9.6 billion.