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The Boeing Company

23 Apr 14. Boeing lifts forecast on strong jet sales
The FT reported that Boeing increased its full-year earnings
projections and announced first-quarter results ahead of analysts’ expectations, as Jim McNerney, chief executive, said the aerospace and defence group was poised for “significant and sustained growth”.

First-quarter net earnings declined 13 per cent to $965m, on revenues up 8 per cent to $20.5bn. However, excluding the 29 cent per-share effect of a non-cash charge for pension plan changes, core earnings per share rose 2 per cent to $1.76. The figure was well above analysts’ projections of $1.56. The results were underpinned by a 23 per cent increase to $1.5bn in earnings from operations at the core Boeing commercial aircraft division, one of the world’s two big makers of commercial jets. The division’s revenues grew 19 per cent to $12.7bn. The improved profitability reflected an increase in aircraft deliveries – to 161, from 137 in the first quarter of 2013 – as the company increased production of its 787 wide-body and 737 narrow-body aircraft.

Mr McNerney said that global customer demand for “fuel-efficient and
value-creating” commercial aircraft remained high, as evidenced by its strong order intake during the quarter. “Global passenger traffic trends remain strong and air cargo traffic continues to gradually improve,” Mr McNerney said. “This ongoing demand reinforces our planned production rates and we believe positions us for significant and sustained growth in the years ahead.”

The company booked a net 235 new orders during the quarter. Its backlog grew from 5,080 when it reported fourth-quarter results to 5,100.

Boeing increased its guidance for full-year core earnings per share to a $7.15 to $7.35 range, from $7.00 to $7.20. Guidance including pension costs remained at $6.10 to $6.30, however, because of the increased pension charge in the first quarter.

The company’s priorities remained achieving a profitable ramp-up in production of its commercial aircraft, executing its commercial and defence development programmes and improving productivity, Mr McNerney said. The company’s shares closed 2.41 per cent higher at $130.63 in New York. At the Boeing defence, space and security unit – which is grappling, like other military contractors, with the effects of declining US weapons spending – earnings from operations declined 6 per cent to $778m. Revenues also declined 6 per cent to $7.63bn. The company is seeking to invest in growth areas and international expansion for its defence business, Mr McNerney said. The company – whose only competitor in the full-size commercial jet market is Europe’s Airbus – reaffirmed its plans to deliver between 715 and 725 commercial aircraft during the year, up from 648 in 2013.

Full Results

The Boeing Company (NYSE: BA) reported first-quarter revenue increased 8 percent to $20.5 bn on higher commercial volume. Core earnings per share (non-GAAP) increased 14 percent* to $1.76 when excluding a benefit of $0.19 per share for the 2012 research and development tax credit recorded in the first quarter of 2013. First-quarter 2014 core operating earnings (non-GAAP) increased 12 percent to $2.1bn and core operating margin (non-GAAP) increased to 10.2 percent reflecting continued strong operating performance. GAAP earnings from operations included previously announced non-cash charges totalling $334m ($0.29 per share) for retirement plan changes.

Core earnings per share guidance for 2014 increased to between $7.15 and $7.35, from $7.00 to $7.20, to reflect the benefit of a tax settlement to be recognized in the second quarter of 2014. GAAP earnings per share guidance for 2014 is reaffirmed at between $6.10 to $6.30 as the tax settlement benefit was offset by the retirement plan charges. GAAP pension expense guidance for 2014 is now at approximately $3.2

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