By Angela Chen
Boeing Co. said its first-quarter profit rose 38% on growth in
its commercial-airlines segment, but its revenue growth didn't keep
pace and costs tied to its flagship 787 program continued to
mount.
Shares, which have risen 18% this year through Tuesday's close,
edged down nearly 2% premarket.
Boeing's results have been buoyed by strong commercial-jet
demand in recent quarters, despite geopolitical developments that
have slowed air-traffic growth in some regions. In the first
quarter, commercial airline revenue grew 21% to $15.38 billion,
while deliveries rose 14% to 184.
However, the company blamed an increase in 787 deliveries for
its operating margin in the segment narrowing to 10.5% from 11.8%.
Losses for the 787 program rose $793 million in the quarter to
$26.94 billion.
Boeing and rival Airbus Group NV have built record order books
on the promise of improved fuel efficiency. Tumbling oil prices,
though, could make airlines defer investment in more fuel-efficient
planes.
The world's largest aerospace company by revenue is now working
through a $495 billion order backlog for commercial jets. That
comes as some industry executives and investors have voiced concern
about a potential bubble in jetliner demand.
Overall, Boeing reported a profit of $1.34 billion, or $1.87 a
share, compared with $965 million, or $1.28 a share, a year
earlier. Core operating earnings, which exclude items including
pension components related to market fluctuations, improved $1.97
from $1.76.
Revenue grew 8.2% to $22.15 billion.
Analysts polled by Thomson Reuters had expected $1.81 in
per-share earnings and $22.49 billion in revenue.
Boeing's defense, space and security segment again posted weaker
results. Revenue dropped 12% in the first quarter, with the biggest
decline coming from the military aircraft divisions, while earnings
from operations edged down 4.5%. The company is restructuring the
defense unit to counter military budget pressures and compete for a
number of coming Pentagon awards.
Boeing backed its financial and deliveries guidance for 2015 and
said it bought back 17 million shares in the quarter for $2.5
billion.
Write to Angela Chen at angela.chen@dowjones.com
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