NEW YORK—Boeing earnings soared in the third quarter and the company hiked full-year forecasts Wednesday as aircraft deliveries picked up to record levels on its huge backlog of orders.
The US aircraft maker said the commercial market continues to grow steadily, despite the global economic slowdown, but said it is also watching for signs of weakness.
Boeing reported that revenues for the period came in at $25.85 billion, up 8.7% from a year ago, translating into net earnings of $1.70 billion, up 25.1% over the third quarter of 2014.
Per-share earnings of the world's leading aircraft maker grew even faster, rising 33% to $2.50.
Core earnings per share, a focus of investors that excludes extraordinary items, added 17.8% to $2.52, soundly beating analyst forecasts of $2.22.
After an equally strong nine-month performance, Boeing hiked its forecasts for the full year, with revenue to reach as much as $97.0 billion and core earnings per share running between $7.95 and $8.15.
That helped drive up Boeing shares 1.4% to $140.84 in trade Wednesday.
The company, whose main rival is Europe's Airbus, showed little weakness in the quarter. It said global economic growth continues at a "moderate" pace, and that passenger traffic and profits for airlines are both strong.
It noted that there are pressures in the United States to cut defense spending, which at $7.9 billion in revenues in the quarter was about half the size of the commercial aircraft business.
But it said there are increasing opportunities elsewhere in the world to help its defense side continue to grow. During the last quarter, for instance, the Chicago-based company won an order from India for 22 Apache attack helicopters and 15 Chinook heavy-lift helicopters. Japan meanwhile ordered five V-22 tilt-rotor aircraft.
In all, Boeing delivered a record 199 new commercial airplanes in the three months to September 30, including 37 Boeing 787s.
It won 166 net new orders, and ended the quarter with a backlog of orders worth $426 billion in commercial aircraft.
On the defense side, it delivered 48 aircraft and finished with an order backlog worth $59 billion.
"By continuing to profitably deliver on our large and diverse backlog, we are driving strong growth in revenue, earnings and cash flow," president and chief executive Dennis Muilenburg said in a statement.
"Solid operating performance across our commercial and defense businesses during the quarter also supported our continued investment in innovation and our people, and our commitment to return cash to shareholders."
Watching Air Traffic Closely
In a conference call with analysts, Muilenburg stressed the company is confident in the outlook and will continue to keep as a high priority share buybacks and dividends.
"Year-to-date, we have returned nearly $8 billion to shareholders through share repurchase and dividends," he said.
But he also pointed to a few clouds over the outlook. For the commercial aviation sector, "traffic remains a watch item for us," he said.
Orders and discussions with customers continue at a healthy pace but are "moderating".
He also suggested a challenge at getting production up to levels required by the company's huge order book.
"Given the strong market demand, we continue to see pressure on narrow body production rates beyond the announced 52 per month in 2018," he said.
"However, we remain steadfast in our financial discipline as we assess the market demand for further production rate changes."
The company already in the last quarter decided to increase the output of the 767, popular as a freight aircraft, to 2.5 per month by 2017.
For the 787 Dreamliner, the company is pushing hard to ramp up from 10 a month currently to 12 a month next year.
Muilenburg also dismissed recent concerns of a bulge in used wide-body aircraft on the market that will pull down the prices of new jets.
He said an estimate of a glut from Delta Air Lines "is in the wrong order of magnitude."
"As I said, traffic growth is sustained. Replacement demand is sustained. Deferrers, cancelations below historic levels," he continued.
"So values are holding up well in the marketplace."
Copyright Agence France-Presse, 2015
