DOHA: Boeing Co yesterday beat profit expectations in the third quarter despite declining revenue, a sign that cost-cutting is having an impact at the world”;s biggest planemaker.
Boeing also notched up its sales forecast for the year, saying it would deliver more jetliners than originally planned. Factoring out a tax benefit, the results showed the effect of Boeing”;s lean manufacturing drive as it tries to boost profit margins and compete for orders against European rival Airbus amid slowing jetliner sales.
Solid operating performance across our commercial and defense and space businesses in the third quarter again generated strong cash flow for Boeing,” Chief Executive Officer Dennis Muilenburg said. Operating cash flow rose 12% to 3.2bn and Boeing affirmed its target of 10bn or more this year.
Analysts said the cash would reassure investors, but added that the stock has limited upside after a recent rally. ‘Sentiment and positioning (in the stock) do not appear particularly negative and we do not believe the stock is set up to run away,” JP Morgan analyst Seth Seifman wrote in a note.
Boeing shares fell as much as 1.7% to 136.72 but later eased to 138.74 on the New York Stock Exchange. Jetliner deliveries were down nearly 3% from a year ago, reflecting fewer profitable 777 and 737 models reaching customers.
But Boeing raised its target for jetliner deliveries for the year to between 745 and 750, from 740 to 745. The additional planes will boost revenue by 500mn, and Boeing raised its year-end revenue target to between 93.5bn and 95.5bn.
Revenue and profit fell in Boeing”;s defence business, partly an effect of the discontinued C-17 transport plane. Boeing”;s adjusted earnings, which exclude some pension and other costs, rose 39% to 3.51 per share, including a tax gain of 70 cents a share it received by claiming more depreciation than it had previously.
