INTERNATIONAL – Boeing topped analysts’ forecasts for quarterly profit on Wednesday despite a series of charges on US military programs and raised its forecasts for annual profit as it continued to benefit from a boom in global air travel and aeroplanes.
Shares of the world’s biggest planemaker were up 4.5 percent in premarket trading, helping brighten the mood on Wall Street after a handful of shaky results on Tuesday from US manufacturers hurt by concerns over global trade.
Soaring demand from commercial airlines has driven another surge in revenues for Boeing over the past year, pushing shares in the company up by roughly a third over the past 12 months.
Those moves have been dented somewhat by a combination of the trade worries, this year’s greater market volatility and a series of recurring charges for its delay-plagued KC-46 tanker program.
Boeing recorded another $176 million (R 2bn) in charges in the quarter on the aerial refuelling tanker, bringing the total cost of the program to more than $3 billion.
It also took a charge of $691 million related to the MQ25 refuelling drone and T-X training jet contracts it won in August and September, offset in part by a $412 million tax benefit.
Despite the charges, Chief Executive Officer Dennis Muilenburg played up the new T-X and MQ25 business and completion of a static test model of its forthcoming 777X widebody, with two test flight jetliners in production.
“This strong underlying performance, along with growth across our businesses we’ve seen throughout the year, give us the confidence to raise our 2018 revenue and earnings guidance and reaffirm our operating cash flow guidance.”
Boeing raised its full-year profit forecast to $14.90-$15.10 from a previous $14.30-$14.50 per share, and revenue to a range of $98 billion to $100 billion, up from $97 billion to $99 billion.
The Chicago-based firm’s core earnings, which exclude some pension and other costs, came in 11 cents above analysts’ average forecast at $3.58 per share in the quarter ended Sept. 30.
Boeing has delivered 568 aircraft in the first nine months of 2018 despite production snarls on its best-selling 737 narrowbodies, up from 554 at the end of September a year ago, putting it on track to deliver another record year of plane sales.
That keeps the manufacturer, which aims to deliver between 810-815 planes in 2018, in front of its European rival Airbus SE (AIR.PA), which delivered 503 aircraft through September this year. Airbus shares gained 2.7 percent.