Boeing hikes ’14 profit forecast after strong Q2

By Veronica Smith, AFP

WASHINGTON — U.S. aerospace giant Boeing on Wednesday raised its full-year profit forecast after earnings soared 52 percent in the second quarter, lifted by increased jetliner deliveries. Boeing posted net profit of US$1.65 billion for the April-June quarter, up from US$1.09 billion in the year-ago quarter. Core earnings per share rose 45 percent to US$2.42, widely topping the US$2.01 expected by analysts. The company delivered 181 commercial aircraft in the second quarter, a solid 7.1 percent increase from 169 planes a year earlier amid robust demand from airlines. Boeing raised its 2014 full-year forecast to core earnings per share between US$7.90 and US$8.10, from US$7.15 to US$7.35, citing in part its “positive market outlook.” The improved earnings outlook, with a midpoint of US$8.00, beat market estimates of US$7.67. The Chicago-based company had also raised its profit forecast at the end of the first quarter.

“Strong operating performance across our production programs and services businesses drove revenue and earnings-per-share growth and healthy operating cash flow,” Boeing’s chairman and chief executive Jim McNerney said in a statement. “With 783 new commercial airplane orders to date this year and significant contracts in the quarter for military aircraft and satellites, our backlog remains large and diverse.” The second-quarter results included a total of US$524 million in tax benefits. They also included an unexpected US$272 million after-tax charge to reflect additional work on the huge KC-46A Tanker program for the U.S. Air Force. Boeing explained the charge was due to higher spending to resolve engineering and systems installation issues on its tanker test aircraft to keep the program on schedule. McNerney said “the issues are well understood” and the company remains on track to begin flight-testing fully provisioned tankers in the first part of next year. In 2011, Boeing won the US$30 billion contract to supply 18 tankers by 2017, beating a bid by European rival Airbus, and plans to deliver the first tanker in early 2016. Boeing expects to build 179 tankers by 2027 if the U.S. Air Force exercises all options under the contract.