Boeing shares surge 5 % after earnings reports
24 Oct 2013
Boeing shares surged over 5 per cent yesterday after reporting better-than-expected earnings.
According to the aircraft manufacturer, its third quarter net income was up by 12 per cent to $1.16 billion as commercial airplane sales growth helped make up for the military aircraft business.
Its pro-forma earnings per share of $1.80, excluding some charges, exceeded analysts' average estimate of $1.55.
Total revenue was up to $22.1 billion from $20 billion a year ago.
Buoyed by the "strong performance," the Chicago-based aerospace giant said it was raising its pro-forma earnings outlook for the year to between $6.50 and $6.65 per share, as against current estimates of $6.38 by analysts.
Shares of Boeing were up $6.54, or 5.3 per cent, to close at $129.02.
The quarter saw, Boeing deliver 170 planes, up from 149 a year ago, with its commercial airplanes division revenue rising 15 per cent to $13.9 billion.
It said, in view of the robust demand for the 787 family of airplanes, Boeing planned to hike the roll out rate for 787s from 10 to 12 per month in 2016, and eventually to 14 by the end of the decade.
The quarter saw the commercial airplanes unit book 200 net orders, even as its backlog had nearly 4,800 airplanes valued at a record $345 billion, according to Boeing.
USA Today quoted Boeing CEO Jim McNerney as saying, airline customers continued to replace older airplanes in favour of new ones that offered compelling operating economics and increased fuel efficiency.
He added, also many airlines around the world were expanding their fleets to support growth in passenger traffic, which further strengthened in recent months.
The 787 Dreamliner has suffered problems after it was introduced which included worldwide grounding for three months earlier this year, following a battery fire in a plane parked in Boston and an emergency landing in Japan due to a smoldering battery.
In more recent mishaps, this month a Polish LOT Dreamliner was diverted to Iceland during a flight from Toronto to Warsaw, due to malfunctioning of its identification system and an electrical glitch that left six toilets unusable on a Japan Airlines flight from Moscow to Tokyo.
The New York Times quoted McNerney as saying the new fuel-efficient planes had been available for scheduled flights 97 per cent of the time since the company began started deliveries in late 2011.
He, however, added airlines were still experiencing too many parts failures and faulty warning messages caused by software problems.
Meanwhile, the company's gains come as an indicator of a strong recovery in jet sales since the recession, particularly in Asia and the Middle East, as also the growing demand for new fuel-efficient planes like the 787.
The Chicago based company, said it delivered 170 commercial planes in the third quarter, higher from 149 a year earlier. (See: Business jet sales expected at $18.4 billion this year).
