Boeing Q3 Profit Up 18%, Results Beat View; Lifts 2014 Outlook Once Again

(RTTNews) - Aerospace and defense giant Boeing Co. (BA) on Wednesday reported an 18 percent increase in profit for the third quarter from last year on higher revenues, reflecting strong demand for commercial aircraft.

Both revenues and adjusted earnings per share for the quarter beat analysts' expectations. Looking ahead to fiscal 2014, Boeing once again raised its earnings outlook, while reaffirming its revenue expectations.

Jim McNerney, Boeing Chairman and CEO, said, "Continued strong operating performance across our production and services businesses drove significant growth in earnings-per-share, and enabled us to continue to capture new business, pushing our order backlog to a record $490 billion."

McNerney added, "We added net new orders for 501 commercial airplanes, launched the high-capacity 737 MAX 200, captured a NASA contract for the Commercial Crew program, and returned $1.5 billion to shareholders through dividends and share repurchases."

The Chicago, Illinois-based company reported net income for the third quarter of $1.36 billion or $1.86 per share, up from $1.16 billion or $1.51 per share in the prior-year quarter.

Excluding items, core earnings for the quarter were $2.14 per share, compared with $1.80 per share in the year-ago period. On average, 21 analysts polled by Thomson Reuters expected the company to report earnings of $1.98 per share for the quarter. Analysts' estimates typically exclude special items.

Total revenues for the quarter grew 7 percent to $23.78 billion from $22.13 billion in the same quarter last year, and beat analysts' consensus estimate of $23.02 billion. The increase in revenues reflect higher deliveries.

Operating margin for the quarter edged up 0.8 percentage points to 8.9 percent.

Segment-wise, Boeing Commercial Airplanes revenue for the quarter increased 15 percent from last year to $16.11 billion, on higher deliveries of aircraft. Commercial airplanes deliveries for the quarter increased 9 percent from the year-ago period to 186.

During the quarter, Boeing launched the 737 MAX 200 with a commitment from Ryanair for 100 airplanes. The 737 program has won nearly 2,300 firm orders for the 737 MAX since launch.

Due to continued strong demand, Boeing intends to increase the 737 production rate from 42 to 47 per month in 2017, with recently announced plans to increase to 52 per month in 2018. Also during the quarter, Boeing delivered the first GEnx-powered 787-9 Dreamliner.

The Commercial Airplanes segment booked 501 net orders during the quarter. The division had a backlog of over 5,500 airplanes, valued at a record $430 billion.

In the Boeing Defense, Space & Security segment, total revenues declined 2 percent from last year to $7.91 billion, with revenues from Network & Space Systems decreasing 9 percent. Boeing Military Aircraft revenues rose 3 percent, reflecting higher P-8 deliveries.

Backlog at Defense, Space & Security was $60 billion, of which 37 percent represents orders with international customers.

Total company backlog of $490 billion at quarter-end rose from $440.3 billion at the beginning of the quarter, and includes $73 billion of net orders during the quarter.

Looking ahead to fiscal 2014, Boeing once again raised its outlook for core earnings to a range of $8.10 to $8.30 per share from the prior range of $7.90 to $8.10 per share, citing its strong operating performance.

The company also raised its outlook for full-year reported earnings to a range of $6.90 to $7.10 per share from the prior range of $6.85 to $7.05 per share.

However, Boeing reaffirmed its outlook for full-year revenue in a range of $87.5 billion to $90.5 billion.

Street expects the company to report earnings of $8.28 per share for the year on revenues of $89.60 billion.

Boeing continues to project commercial aircraft deliveries for the year between 715 and 725, assuming about 110 deliveries of the 787 aircraft.

In a separate statement, Boeing said that in collaboration with Commercial Aircraft Corp. of China or COMAC, it has opened a demonstration facility that will turn waste cooking oil, commonly referred to as 'gutter oil' in China, into sustainable aviation biofuel.

The two companies estimate that 500 million gallons or 1.8 billion liters of biofuel could be made annually in China from used cooking oil.

Boeing and COMAC are sponsoring the facility, which is called the China-U.S. Aviation Biofuel Pilot Project. It will use a technology developed by Hangzhou Energy & Engineering Technology Co., Ltd. to clean contaminants from waste oils and convert it into jet fuel at a rate of 160 gallons or 650 liters, per day.

BA closed Tuesday's trading at $127.12. In Wednesday's pre-market trades, the stock is up $0.19 or 0.15 percent to $127.31.