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TEHRAN, July 25 -Boeing Co (BA.N) reported a better-than-expected profit on Wednesday, but cut its full-year forecast for margins in its defense business, citing higher costs in the KC-46 aerial refueling tanker program.
TEHRAN, Young Journalists Club (YJC) -Boeing Co (BA.N) reported a better-than-expected profit on Wednesday, but cut its full-year forecast for margins in its defense business, citing higher costs in the KC-46 aerial refueling tanker program.
Shares of the world’s biggest planemaker fell 3.3 percent premarket after it forecast a 2018 operating margin of 10 percent to 10.5 percent in its defense business, down from its previous outlook of 11 percent.
Boeing sees 2018 core earnings of $14.30 to $14.50 per share, unchanged from the same period last year, but below the Wall Street estimate of $14.56 per share. Core earnings exclude some pension and other costs.
The Chicago-based company raised it full-year revenue forecast, but kept its earnings per share and cash flow forecasts unchanged.
Operating margins in its defense, space and security unit fell to 9.3 percent in the quarter from 11.9 percent a year earlier, reflecting increased costs of $111 million in the KC-46 Tanker, Boeing said.
The KC-46, an U.S. Air Force aerial refueling program, has troubled Boeing for years as it struggled to get airworthiness certifications and complete flight tests.
After delays last year Boeing was forced to take a $329 million charge for the program. Last month, the Air Force said the first delivery of the KC-46 would be in October.
Second-quarter core earnings came to $3.33 per share in the quarter, beating the average analyst estimate of $3.26 per share, according to Thomson Reuters I/B/E/S.
Overall revenue rose 5 percent to $24.26 billion, also beating estimates, while commercial aircraft deliveries rose 6 percent to 194 aircraft. Boeing booked 239 net orders during the quarter, including 91 wide-body jets.
For the full year, the company expects total revenue of $97 billion to $99 billion, compared with its previous estimate of $96 billion to $98 billion.
In its commercial airplanes segment, its largest, operating margins rose to 11.4 percent from 9 percent a year ago on revenue of $14.48 billion. Revenue was $14.28 billion in the year-ago period.
Source: Reuters
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