Boeing’s net income rises after strong second quarter
July 26, 2012, New York – Boeing Co. posted an unexpected three per cent improvement in second-quarter net income on strong sales of commercial airplanes. The results surprised Wall Street, and the company raised its earnings forecast for the year.
July 26, 2012 By Samantha Bomkamp | The Associates Press
July 26, 2012, New York – Boeing Co. posted an unexpected three per cent improvement
in second-quarter net income on strong sales of commercial
airplanes. The results surprised Wall Street, and the company raised
its earnings forecast for the year.
The results announced before the markets opened Wednesday eased
investors' fears of an imminent slowdown in the company's defence
unit, which produces Chinook helicopters and F-18s, among many other
They also highlighted strong growth in the company's commercial
airplane unit, which has been rapidly increasing the pace of
production for some planes to meet demand.
Shares rose more than two per cent in premarket trading.
The company reported net income of U.S. $967 million, or $1.27 per
share, for the April-June period compared with $941 million, or
$1.25 per share, a year earlier.
Revenue jumped 21 per cent to $20 billion from $16.54 billion a
Analysts polled by FactSet had expected earnings of $1.13 per
share on revenue of $19.28 billion.
Defence revenue rose 7 per cent, while revenue in the commercial
airplane division jumped 34 per cent. The divisions are roughly the
same size, but some observers fear they will go in opposite
Boeing's defence unit is vulnerable to potentially severe
military spending cuts in January. The cuts would be automatic
unless Congress agrees to an alternative for cutting the deficit.
The military would face $492 billion in cuts over a decade, with
domestic spending reduced by another $492 billion over 10 years.
But it's clear the unit is holding strong. The second-quarter
revenue growth is about the same as Boeing saw in the first three
months of the year. Defence contractor Lockheed Martin had reported
second-quarter results that surprised Wall Street earlier.
Boeing's commercial airplane unit, meanwhile, is rapidly speeding
production and deliveries of its new 787. That will move planes that
have been mostly finished, but undelivered, out of inventory and
turn them into cash. Boeing is also booking firm orders for its new
737 Max, a redesigned version of its classic 737.
For all of 2012, Boeing Co. now expects to earn $4.40 to $4.60
per share, up from between $4.15 and $4.35. Still, that new forecast
is mostly under what Wall Street is banking on. Analysts predict
$4.57 per share, on average.
Its shares rose $1.97, or 2.7 per cent, to $74 in premarket