Boeing 2Q profit tops expectations; boosts outlook

Boeing 2Q profit tops expectations; boosts outlook

Credit: ERIC PIERMONT/AFP/Getty Images

A British Airways Airbus A380 flies over a Qatar Airways 787 Dreamliner at Le Bourget airport, north of Paris, on June 17, 2013, on the opening day of the International Paris Air show.

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by Associated Press

KING5.com

Posted on July 24, 2013 at 5:58 AM

Updated Wednesday, Jul 24 at 6:36 AM

Boeing posted a bigger-than-expected second-quarter profit as it ramped up deliveries of commercial planes like its 737 and 787.

The company also raised its full-year earnings guidance, and its shares rose nearly 2 percent in premarket trading.

Boeing is in the midst of a boom in airplane orders as airlines in Asia and Latin America expand. It is speeding up production of its 737 as well as the new 787. Deliveries of all commercial planes rose 13 percent to 169 planes during the quarter.

Deliveries of the 787 were temporarily halted earlier this year when the plane was grounded because of battery problems. But they resumed in May and Boeing delivered 16 of the jets during the quarter. It said it still expects to deliver at least 60 of the 787s this year -- the same goal it had before the battery problems surfaced in January.

Boeing's net income rose 13 percent to $1.09 billion, or $1.41 per share. During the same period last year it earned $967 million, or $1.27 per share. Revenue rose 9 percent to $21.82 billion.

The results include costs from pensions. On that basis, analysts surveyed by FactSet had been expecting a profit of $1.30 per share with revenue of $20.79 billion.

Boeing Co. shares rose $1.94, or 1.8 percent, to $109.73 in premarket trading.

Boeing raised its full-year profit guidance to $6.20 to $6.40 per share -- a dime higher than its old guidance. Once it pays for pension expenses it will earn $5.10 to $5.30 per share. On that basis, analysts are expecting $5.34 per share.

The company now expects revenue of $83 billion to $86 billion, which is $1 billion more than it previously predicted. Analysts were expecting $84 billion.

Revenue from commercial planes rose 15 percent to $13.62 billion, and profits in that segment jumped 20 percent to $1.45 billion. The 787s actually hurt profit margins because they costs more to build than Boeing is collecting, but delivering the planes brings in more revenue.

Things are slower at Boeing's defense arm. Revenue there was flat at about $8.19 billion, although operating profits rose 4 percent to $776 million. Boeing and other defense contractors have had to cope with the automatic federal spending cuts that took effect in the spring.

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