Boeing profit takes hit from tanker, 747; outlook unchanged
By Alwyn Scott
(Reuters) - Boeing Co took a surprise $156 million charge for its KC-46 aerial refueling tanker on Wednesday, pushing first-quarter profit down 9 percent amid concern about meeting deadlines for the U.S. Air Force program.
The world's largest plane maker also took a $70 million pretax charge for its 747 program, or about 7 cents a share after tax, reflecting a weak air cargo market that has slowed sales of freighter versions of the jumbo jet.
Earnings fell to $1.22 billion, or $1.83 per share, from $1.34 billion, or $1.87 per share, a year earlier.
But Boeing backed its full-year profit and revenue forecasts, saying it was confident other parts of its business could make up for the added expenses. It reported a better performance in its defense business for the quarter.
Analysts largely looked past the charges, noting that cash flow was slightly better than expected and revenue was strong.
"The cash flow story is intact" along with the outlook, Citi analyst Jason Gursky said in a note to clients. "We'd be buyers on weakness today."
Boeing shares were up 2 percent at $136.02 after falling 1.8 percent in premarket trading.
Some analysts had anticipated a tanker charge after the government said earlier this year that the program was at risk of falling behind schedule. Boeing has already taken nearly $1.3 billion in charges on the program. Continued...