Defense and aerospace giant Boeing Co. (BA) reported Wednesday a climb in first-quarter profit benefited by a tax credit, even as revenues were hurt mainly by lower 787 deliveries. The company, which has been struggling to fix battery issues at its 787 Dreamliner, backed its fiscal 2014 forecast for earnings, revenues and deliveries.
In pre-market activity, Boeing shares increased $3.15 or 3.57 percent, and currently trading at $91.33.
Chairman, President and Chief Executive Officer Jim McNerney said, "Strong core operating performance fueled by productivity gains and solid program execution drove higher company earnings and double-digit operating margins in both major businesses during the quarter."
In its recently concluded first quarter, Boeing's net earnings increased 20 percent to $1.11 billion from $923 million in the prior year. Earnings per share rose 18 percent to $1.44. The latest quarter results included unallocated pension /postretirement expense of $0.29 per share, higher than last year's $0.18 per share.
Core earnings per share, which excluded one-time expenses, climbed 24 percent to $1.73. On average, 18 analysts polled by Thomson Reuters expected the company to report earnings of $1.48 per share for the quarter. Analysts' estimates typically exclude special items.
According to the company, the first-quarter 2013 results included the expected benefit of $0.19 per share for the 2012 research and development tax credit, while last year's results included a benefit of $0.11 per share related to a favorable court judgment on satellite litigation.
Operating margin remained flat with last year's 8.1 percent, while core operating margin improved 0.8 percentage points to 9.9 percent.
Total revenues dropped 3 percent to $18.89 billion from $19.38 billion in the prior year, while analysts ' consensus were $18.84 billion. The company noted that the higher deliveries on the 737 and 777 was offset by lower 787 deliveries.
Total company backlog at year-end was $392 billion, up from $390 billion at the beginning of the year, and included net orders for the quarter of $20 billion.
In April, the Federal Aviation Administration gave the approval for airlines to begin the process of returning the 787 to service with an enhanced battery system. The company's airplanes had been grounded earlier this year on some battery issues.
Looking ahead for fiscal 2013, Boeing continues to expect earnings in a range of $5.00 to $5.20 per share, and core earnings in a range of $6.10 to $6.30 per share. The guidance reflects continued strong core performance, generating an expected 5 percent increase in core earnings per share, the company noted.
The company also reaffirmed its fiscal 2013 revenue outlook in the range of $82 billion to $85 billion. Analysts expect the company to report earnings of $6.37 per share on revenues of $83.84 billion for fiscal 2013.
Full-year deliveries at commercial airplanes segment are still projected between 635 and 645 airplanes.
McNerney added, "Our outlook for the year is positive, and our financial and delivery guidance is reaffirmed as we remain focused on the profitable ramp up in commercial airplane production rates, disciplined execution of our development programs, and continued growth in core, adjacent and international defense and space markets."
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