US aerospace and defense giant Boeing raised its 2014 profit outlook Wednesday despite a first-quarter profit slide, citing strong demand for its new jetliners.
A sharp rise in pension costs from a change in retirement plans offset Boeing’s robust commercial aircraft deliveries as airlines seek to renew aging fleets with more fuel-efficient jetliners.
Boeing posted net profit in the first quarter of $965 million, down 12.7 percent from a year ago but nevertheless better than analysts expected.
Boeing took a $334 million charge for retirement plan changes.
Core earnings per share came in at $1.76, three cents higher than a year ago and well above the $1.56 estimate.
Boeing posted an 8.3 percent rise in revenues to $20.47 billion, and operating cash flow soared 112 percent to $1.1 billion.
The Chicago-based company raised its 2014 profit forecast to between $7.15 and $7.35 per share, from $7.00 to $7.20, to reflect a tax settlement.
“Our outlook for the full year remains positive on the strength of demand for our fuel-efficient new commercial airplanes, our solid position in global defense, space and security markets” and the company’s focus on improving financial and operational strength, Boeing chairman and chief executive Jim McNerney said in a statement.
Though the 2015 earnings forecast missed Wall Street expectations, Boeing shares scored a solid gain. Investors received more than $3 billion during the quarter through its share repurchase program and dividends.
Boeing shares jumped 2.1 percent to $130.24 in midday trade on the New York Stock Exchange, the best performer on the Dow Jones Industrial Average in an overall lower market.
Commercial aircraft revenues climbed 19 percent to $12.74 billion on higher deliveries of two of its best-selling models — the 787 Dreamliner and the 737 — after the company boosted production rates to cope with surging demand.
Boeing tops Airbus deliveries
Boeing heftily beat European rival Airbus in the deliveries race. The company delivered 161 jetliners in the January-March quarter, a year-over-year gain of 18 percent; Airbus delivered 141.
The re-engined 737 made up the bulk of the deliveries at 115, while 18 of the high-tech 787 Dreamliners were sent to customers. A year ago Boeing only delivered one 787 after the airplane was grounded worldwide following battery problems.
The company said it expects to deliver between 715 and 725 jetliners this year, after a record 648 deliveries in 2013.
Boeing Commercial Airplanes won 235 net orders during the first quarter, which ended with a backlog of more than 5,1000 airplanes valued at $374 billion.
Boeing’s smaller segment — Defense, Space and Security — continued to reflect lower US defense spending in the wake of budget cuts. Revenues fell 5.9 percent to $7.63 billion, amid a sharp drop in military aircraft revenue.
The company’s total backlog was $440 billion, down slightly from the beginning of the year. It included net orders for the first quarter of $19 billion.
At the end of the quarter on March 31, Boeing had a cash pile of $12.2 billion, down from $15.3 billion at the beginning of the year. The decline was mostly due to the share repurchases and the pay-down of maturing debt, it said. Debt was $8.9 billion, down from $9.6 billion.
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