Boeing's second-quarter profit falls

Boeing's second-quarter profit falls

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Story Published: Jul 23, 2008 at 8:07 AM PDT

Story Updated: Nov 20, 2008 at 11:34 PM PDT

By Associated Press

PITTSBURGH (AP) - Boeing Co., the world's second-largest commercial airplane maker, on Wednesday said second-quarter earnings fell 19 percent due to a previously disclosed $248 million charge for delays in fulfilling a defense contract.

Shares of the Chicago-based company fell about 4 percent in early trading.

Boeing reported earnings of $852 million, or $1.16 per share, for the three months ended June 30, compared with $1.05 billion, or $1.35 per share, a year earlier.

Revenue remained essentially flat at $17 billion.

Excluding the charge tied to the Airborne Early Warning & Control program, the company earned $1.38 per share.

Analysts polled by Thomson Financial, on average, expected profit of $1.23 per share on revenue of $17.24 billion. Those estimates typically exclude one-time items.

Earlier this month, Boeing said quarterly results would include the charge due to delays in delivering six military aircraft to Australia. But the company says its anticipated annual performance will offset the charge.

Boeing's commercial airplane business reported a 19 percent decline in quarterly earnings from operations, to $777 million from $960 million last year, due to customer and model mix and costs tied to its long-delayed 787 Dreamliner.

The company said 787 production was following a revised schedule announced in April, and that the program is in the final stages of assembling the first airplane in preparation for a test flight.

Quarterly revenue for the unit fell 2 percent to $8.57 billion from $8.71 billion.

Looking ahead, Boeing reaffirmed its earnings outlook for 2008 and 2009 and said its backlog rose 6 percent to a record $346 billion, bolstered by commercial airplane orders.

"While we faced some challenges this quarter that affected our results, we remain confident in our outlook for the remainder of this year and 2009," Jim McNerney, Boeing's chairman, president and chief executive, said in a statement.

"Strong global demand for our products and services, a record backlog, and a sustained focus on productivity improvement and execution will continue to drive growth and profitability for this company," he said.

For the first half of the year, profit increased 7 percent to $2.1 billion and revenue edged up 2 percent to $33 billion.

Boeing backed its 2008 earnings guidance of between $5.70 and $5.85 per share and its 2009 guidance of between $6.80 and $7.00 per share.

Boeing's stock slipped $2.78 to $66.48 in early trading. Year-to-date, shares have fallen about 23 percent.

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