Boeing Profit Drops on Lag in Commercial Deliveries

Boeing Co said its profit for the first quarter fell as the airplane maker delivered less commercial jets.

Despite a drop and miss in earnings, as the adjusted profit came up short of expectations on Wall Street, the company kept its guidance for the full year.

Dennis Muilenberg the CEO at Boeing said the company was pleased with its performance trends as well as its outlook for 2016 remaining positive.

Boeing, based in Chicago, is the largest aerospace company in the world, and has delivered solid earnings the past few years, driven in large part by the booming demand in commercial jets.

However, earlier in 2016, the company released an outlook that came up short of Wall Street expectations.

Boeing announced that it would be delivering between 740 and 745 commercial aircraft during 2016, which was down from last year’s record high of 762. At the same time, the company has accelerated its move into the parts business as one part of a broader effort of cutting costs and of securing new, lucrative source of income.

During the most recent quarter, deliveries of commercial aircraft reached 176, which was down over 4.3% from the same quarter last year.

As far as revenue, in the commercial segment of Boeing there was a decline of 6.4% to just over $14.4 billion. Boeing said that it started major assembly ahead of schedule of the 787-10 and said its backlog for the end of the recent quarter had a $424 billion value.

More deliveries of its military aircraft helped Boeing offset a softer commercial business. Its revenue from its military aircraft increase by close to one third, thanks in part to the higher deliveries of C-17 and F-15 aircraft.

Rival contractors for military aircraft have reported improved business as well during the first three months of 2016. On Wednesday, L-3 and Northrop Grumman topped their expectations and raised their guidance while Lockheed Martin did that on Tuesday.

In all, Boeing for the quarter posted a $1.22 billion profit equal to $1.83 per share, which was down from the $1.34 billion equal to $1.87 for the same period one year ago.

Excluding any charge related to the tanker program of the company adjusted per share earnings fell from $1.97 to $1.74.

 

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