Boeing has reported a better than expected profit, but cut its full-year forecast for margins in its defence business, citing higher costs in the KC-46 aerial refueling tanker programme.
The world's biggest planemaker forecast a 2018 operating margin of 10-10.5% in its defence business, down from its previous outlook of 11%.
Boeing sees 2018 core earnings of $14.30 to $14.50 per share, unchanged from the same time last year, but below the Wall Street estimate of $14.56 per share. Core earnings exclude some pension and other costs.
The Chicago-based company raised it full-year revenue forecast, but kept its earnings per share and cash flow forecasts unchanged.
Operating margins in its defence, space and security unit fell to 9.3% in the quarter from 11.9% a year earlier, reflecting increased costs of $111m in the KC-46 Tanker, Boeing said.
The KC-46, an US Air Force aerial refueling programme, has troubled Boeing for years as it struggled to get airworthiness certifications and complete flight tests.
After delays last year Boeing was forced to take a $329 million charge for the programme.
Last month, the Air Force said the first delivery of the KC-46 would be in October.
The company said today that second-quarter core earnings came to $3.33 per share in the quarter, beating the average analyst estimate of $3.26 per share, according to Thomson Reuters.
Boeing's overall revenue rose 5% to $24.26 billion, also beating estimates, while commercial aircraft deliveries rose 6% to 194 aircraft.
Boeing booked 239 net orders during the quarter, including 91 wide-body jets.
For the full year, the company expects total revenue of $97 billion to $99 billion, compared with its previous estimate of $96 billion to $98 billion.
In its commercial airplanes segment, its largest, operating margins rose to 11.4% from 9% a year ago on revenue of $14.48 billion. Revenue was $14.28 billion the same time last year.