Boeing Profit Rises, But Company Cuts Outlook
Boeingsaid Wednesday third-quarter profit rose more than expected, helped by higher deliveries of commercial planes, but it scaled back its revenue forecast for next year due to delays on its 787 Dreamliner and slowing growth at its defense unit.
The world's biggest-selling jet maker, which is also the No. 2 U.S. defense contractor, earlier this month said its hot-selling 787 would be at least six months late as it wrestles with uncompleted work from suppliers, integrating the plane's software and an acute shortage of bolts.
The Chicago-based company said Wednesday it was still addressing "challenges" as it builds the first batch of 787s, aiming for the first test flight around the end of March next year. It expects the first delivery in late November or December 2008.
"The focus will be on the 787 and whatever may be said (on the conference call) on the viability of their current schedule," said Paul Nisbet at aerospace specialists JSA Research. "That will be the key."
Boeing shares rose about 1 percent to $95.80 in pre-market trading.
Boeing reported quarterly net profit of $1.1 billion, or $1.44 per share, compared with $694 million, or 89 cents per share, a year earlier.
Earnings from continuing operations were $1.43 per share, which easily beat Wall Street's average forecast of $1.24, according to Reuters Estimates.
Revenue rose 12 percent to $16.5 billion, above analysts' average forecast of $16.05 billion.
Plane Deliveries Jump
Boeing delivered 109 commercial planes in the quarter, up 9 percent from the year-ago quarter, which helped boost sales at its commercial planes unit by 23 percent to $8.3 billion.
Defense revenue increased a more modest 3 percent to $8 billion, helped by strong sales at its network and space systems unit.
Boeing raised its profit forecast for the full year to a range of $5.05 and $5.15 per share, up from a previous forecast of $4.80 to $4.95. That is in line with Wall Street's average estimate of $5.06 per share.
It kept its 2008 profit forecast of $5.55 to $5.75 per share, below Wall Street's average estimate of $6.04, and lowered its revenue forecast to account for the six-month delay in 787 Dreamliner production and slower growth in its defense unit.
Boeing said it now expects 2008 revenue of $67.5 billion to $68.5 billion, down from its previous estimate of $71 billion to $72 billion. Analysts are expecting $71.2 billion on average.
Its is now expecting to deliver 480 to 490 commercial planes next year, down from its previous estimate of 515 to 520, as delayed 787 deliveries are pushed into 2009.