Boeing Buoyant About Second-Half

(RTTNews) - Aerospace and defense giant Boeing Co. (BA) is scheduled to check in its third-quarter numbers Wednesday, October 21, 2015. Analysts are estimating earnings of $2.22 per share on revenue of $24.69 billion for the quarter. In the last quarter, the company's net income was $1.11 billion or $1.59 per share on revenue of $24.54 billion.

Most recently, the company reported that it delivered 199 commercial airplanes in the third quarter versus 186 deliveries a year ago. This airplane maker has delivered 580 aircrafts so far this year compared to 528 deliveries reported last year.

FY Outlook

For fiscal 2015, the company lowered its core earnings guidance range to a range of $7.70 - $7.90 per share from the prior range of $8.20 - $8.40 per share, to reflect the impact of the second-quarter 2015 KC-46 Tanker charge.

The company also lowered its outlook for full-year reported earnings to a range of $7.60 - $7.80 per share, from the previously communicated range of $8.10 - $8.30 per share.

However, the company reiterated its full-year revenue outlook of between $94.5 billion and $96.5 billion, with commercial deliveries of between 750 and 755 airplanes.

Street analysts are currently looking for full-year 2015 earnings of $8.06 per share on revenue of $95.36 billion versus their previous estimate of $7.88 per share on revenues of $94.79 billion.

Boeing President and Chief Executive Officer Dennis Muilenburg, said:

"Overall, our outlook for the second half of the year remains positive. On the tanker program, we are investing the necessary resources to keep this vitally important program on schedule for our customer. We have a clear understanding of the work to be done and we are confident that the long-term financial value of the program will reward our additional investment."

"With our sustained focus on productivity and growth, we will continue to profitably deliver on our large and diverse backlog, capture new orders, and deliver increasing value to all of our stakeholders."

Q2 Results

Boeing reported lower profit for the second quarter, as higher revenues were more than offset by a charge related to its military tanker program. However, both revenues and core earnings per share topped analysts' expectations.

The company's second-quarter net income was $1.11 billion or $1.59 per share, down from $1.65 billion or $2.24 per share in the prior-year quarter.

The latest quarter's results included the previously announced after-tax charge of $536 million or $0.77 per share on the KC-46 aerial refueling tanker program, reflecting higher estimated costs.

Boeing said the charge on the tanker program reflects higher estimated engineering and manufacturing costs to complete development, certification and initial production of the tanker aircraft, while holding to the program schedule for initial production deliveries in 2017.

Excluding items, core earnings for the quarter were $1.62 per share, compared to $2.42 per share in the year-ago period.

On average, 15 analysts polled by Thomson Reuters expected the company to report earnings of $1.37 per share for the quarter. Analysts' estimates typically exclude certain special items.

Total revenues for the quarter grew 11% to $24.54 billion from $22.05 billion in the same quarter of last year, reflecting higher commercial deliveries. Analysts were looking for revenue of $24.22 billion.

Boeing President and Chief Executive Officer Dennis Muilenburg said, "Strong operating performance across our commercial and defense production programs partially offset the tanker charge and enabled us to maintain our commitments to return cash to our shareholders and invest in innovation and our people."

Operating margin for the quarter declined 120 basis points to 6.9 percent, reflecting the charge on the KC-46 Tanker program.

Recent Happenings

Last week, Boeing announced that Taiwan-based EVA Airways intends to buy up to 26 widebody aircraft, valued at more than $8 billion at current list prices. This includes up to 24 Boeing 787-10 Dreamliner aircraft and two additional 777-300ER or extended range jetliners.

Boeing noted that EVA Airways will join the 787-10 launch customer team and will be one of the first airlines in the world to introduce the newest member of the 787 Dreamliner family.

Oct. 12, Boeing acquired Peters Software GmbH, a provider of European Aviation Safety Agency or EASA-based training content for early stage pilot training. Terms of the agreement remain undisclosed. Peters Software and its team of 20 full time employees joined Boeing upon contractual signing.

In mid September, Boeing said it has received orders and commitments from China for 300 aircraft worth $38 billion at list prices. The aerospace giant also said it will to open a facility in China for the interiors completion, paint and delivery of Boeing 737 aircraft to Chinese customers.

Boeing will increase production to 47 airplanes per month in 2017 and 52 airplanes per month in 2018 to meet strong demand for the 737, the world's most fuel-efficient single-aisle airplane.

Earlier last month, Boeing finalized an order for 27 Next Generation 737-800s with UK Leisure Airline Jet2.com, valued at approximately $2.6 billion at current list prices. The order will be delivered over the next two years.

Jet2.com, a unit of UK Leisure Travel and Distribution & Logistics Group Dart Group PLC (DTG.L), currently operates an all-Boeing fleet of nearly 60 aircraft, however, this is the organization's first direct Boeing order.

August 25, Boeing said it sees a demand in China of 6,330 new airplanes over the next 20 years, at an estimated value of $950 billion. The company released its annual China Current Market Outlook recently in Beijing.

These 6,330 deliveries amount to 16.6% of world total, and the estimated $950 billion represent 17% of world total. Last year, Boeing projected a demand in China of 6,020 new airplanes over the next 20 years, valued at $870 billion.