April 22--Chicago-based Boeing delivered more airplanes in the first quarter, offsetting sluggish results in the defense side of its business and pushing first-quarter profit beyond expectations, the company said Wednesday.
Profit: Earnings were up 38 percent, topping Wall Street expectations. The company said profits were $1.34 billion, or $1.87 per share. Excluding $113 million in pension expenses, the company said adjusted profit was $1.97 per share -- beating the $1.81 per share forecast by analysts surveyed by Zacks Investment Research. A year earlier, adjusted profit was $1.76 per share.
Like in recent quarters, it was a tale of Boeing's two different business segments. Earnings from commercial airplanes, accounting for two-thirds of profit and sales, rose 8 percent. The defense and space business declined, with earnings down 4 percent as tight defense budgets cut into sales.
Revenue: Revenue rose 8 percent to $22.15 billion. But six analysts surveyed by Zacks expected $22.63 billion. In the first quarter, Boeing delivered 184 airliners, up from 161 in the same period last year, with two-thirds of them for the venerable 737 jet, a workhorse on short and midrange routes around the world. The company backlog is valued at $495 billion.
Why? Boeing's commercial-planes business is soaring as airlines use some of their record profits to buy new more fuel-efficient jets. Cheaper jet fuel is not hurting demand for new Boeing aircraft, though fuel efficiency is one of the main selling points for many newer Boeing models. The company said return on investment for new planes is still high because they offer higher passenger and cargo revenue, higher residual values, better passenger experience and greater flight range, which allows flights between new city pairs. Requests to delay deliveries of new planes are running "well below" historical averages, the company said.
Quote you on that: "These remain very good times for our industry," Boeing CEO Jim McNerney said in a call with industry analysts and media Wednesday. "Lower oil prices have not fundamentally changed our customers' view on fleet planning or their commitment to existing delivery schedules."
What's next? The company reaffirmed its forecast for full-year earnings in the range of $8.20 to $8.40 per share and revenue of $94.5 billion to $96.5 billion. Boeing's long-term outlook remained positive, expecting airline fleet growth and demand for replacing older aircraft to drive the need for nearly 37,000 aircraft over the next 20 years.
Market reaction: Boeing shares slipped after the announcement. Its stock price has risen 18 percent so far in 2015, compared with about a 2 percent gain in the Standard Poor's 500 index.
Associated Press contributed.
gkarp@tribpub.com
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