Boeing second-quarter
earnings top estimates; raises 2017 forecast again
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[July 26, 2017]
By Alwyn Scott
(Reuters) - Boeing Co on Wednesday posted
second-quarter profit and cash growth that beat analysts' estimates even
though sales were less than expected, sending shares up sharply.
The profitability of its 787 Dreamliner contributed to strong cash flow
as the world's biggest plane maker focuses on streamlining production of
new 737 MAX models and finishing development of other forthcoming
planes. The company also benefited from cost-cutting.
Boeing said it will cut full-year capital expenditure by $300 million
and was making $3.5 billion in additional pension contributions to
reduce future costs.
The capital spending plan was not a surprise since Boeing already has
made most of the big investments in its new 777X wing factory and on the
737 MAX and 787-10 programs, said analyst Richard Aboulafia at Teal
Group.
"Capex was bound to decline," he said.
Boeing added $1.5 billion to its operating cash flow forecast for the
year, raising it to about $12.25 billion. It is increasing its planned
share repurchases this year by $3.5 billion, bringing the total to about
$10 billion.
The company lifted its full-year forecast for core earnings, which
exclude some pension costs, by 75 cents to between $11.10 and $11.30 a
share, its second upward revision this year.
Boeing shares were up 3.5 percent at $220.00 in premarket trading. The
stock has rocketed up 37 percent this year.
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Workers check over the new Boeing 787-10 Dreamliner after it's first
test flight at the Charleston International Airport in North
Charleston, South Carolina, United States March 31, 2017.
REUTERS/Randall Hill/File Photo
Boeing swung to a profit of $1.76 billion, or $2.89 per share, in the second
quarter, from a loss of $234 million, or 37 cents per share, a year earlier.
Last year's results included more than $2 billion in charges related to the 787,
747 and KC-46 tanker aircraft programs.
Core earnings, which excluded some pension and other costs, were $2.55 per share
in the quarter.
Revenue fell 8.1 percent to $22.74 billion.
Analysts expected core earnings of $2.30 per share on revenue of $23 billion,
according to Thomson Reuters I/B/E/S.
Commercial aircraft deliveries fell to 183 from 199 a year ago. Boeing said it
still expects to deliver 760-765 commercial aircraft in 2017.
(Reporting by Alwyn Scott in New York and Ankit Ajmera in Bengaluru; Editing by
Saumyadeb Chakrabarty and Jeffrey Benkoe)
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