Business

October 24, 2012

Pension expense hurts Boeing third quarter net

Boeing said its net income this year will be bigger than it had expected as deliveries of commercial airplanes picks up.

Higher pension expenses hurt Boeing’s third-quarter profit, but other measures for the big airplane maker and defense contractor were strong. Profits rose in both its commercial and defense units. And it reaffirmed plans to deliver 585 to 600 commercial planes this year.

For the quarter that ended Sept. 30, Boeing’s net income fell 6 percent to $1.03 billion, from $1.1 billion a year ago. The profit of $1.35 per share would have been higher by 18 cents per share if not for increased pension expenses. During the same period last year, it earned $1.46 per share.

Analysts surveyed by FactSet were expecting earnings of $1.12 per share for the most recent quarter.

Revenue rose 13 percent to $20 billion as the pace of commercial airplane deliveries picked up. That matched analyst expectations.

Chicago-based Boeing Co. now expects to earn $4.80 to $4.95 per share this year, up from previous guidance of $4.40 to $4.60 per share. Analysts had been expecting $4.72 per share.

Boeing’s commercial airplanes unit saw operating earnings rise 6 percent to $1.15 billion for the quarter. It delivered 149 planes during the most recent quarter, up from 127 a year ago. Boeing delivered its first 787 last year and has been speeding up deliveries in earnest. It is also speeding production of its profitable 777. Revenue from commercial planes jumped 28 percent to $12.19 billion in the most recent quarter.

Earnings in Boeing’s defense, space, and security unit rose slightly to $827 million. Revenue fell 4 percent to $7.84 billion. Defense contractors in general have been struggling with tighter military spending, and the threat of more reductions to come, in both the U.S. and overseas.

 




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