Boeing posts 20% hike in earnings, shares rally
The Boeing Company (NYSE:BA) announced Wednesday a 20% increase to its second quarter net income, beating Street estimates and prompting the company to update its outlook, causing its shares to rise.
For the three months ending June 30, the aircraft manufacturer posted net income of $941 million, or $1.25 per share, 20% higher than $787 million, or $1.06 per share, a year ago.
Revenues rose 6% to $16.54 billion, from last year's $15.57 billion.
Analysts had anticipated earnings of $0.96 per share, on revenues of $16.43 billion.
"Strong operational performance drove double-digit margins at both of our major businesses and produced outstanding results in the quarter," said president and CEO, Jim McNerney.
"Our outlook for the year has strengthened as our team continues its relentless focus on productivity improvement, cash management and program execution."
As its core businesses strengthen, Boeing opted to increase its earnings outlook for the full year to a range of $3.90 to $4.10 per share, from its previously announced guidance of between $3.80 and $4.00 per share.
The company's revenues estimate is unchanged, at between $68 billion and $71 billion for the year.
Analysts are expecting earnings of $4.11 per share on $69.37 billion in revenues.
Throughout the quarter, Boeing delivered 118 commercial airplanes, for $8.8 billion in revenues, a 19% increase over the year-ago period. It said improved model mix, and increases in service volume and in deliveries, most of which were of its flagship airplane, the Boeing 737, prompted the growth.
Commercial airplane backlog remains strong, with over 3,300 airplanes, valued at $262 billion, it said.
Revenues from the company's defense, space and security segment, which markets and manufactures jets and other military aircrafts, slipped 4% to $7.7 billion, as its network and space systems portion saw a 12% drop in revenues to $2.1 billion on funding cuts in the Brigade Combat Team Modernization.
Nearly 30 new planes were delivered in the quarter, most of them F/A-18 models, followed by Boeing's CH-47 Chinook.
Still, the defense business remains strong after Boeing announced it signed an agreement with India for ten C-17s, and was awarded the U.S. Navy's study contract for the Unmanned Carrier-Launched Airborne Surveillance and Strike Program.
Backlogs for the segment total approximately $48.1 billion.
Boeing's total backlog at the end of the quarter, however, slipped to $323 billion, from $329 billion at the quarter's start.
The Chicago, Illinois-based company's stock on the New York Stock Exchange rose 3.91% to trade at $72.90 per share as of 12:40 pm EDT.
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