Boeing Beats Estimates on Higher Aircraft Deliveries but Defense Revenue Drops

Tickers in this article: BA
Chicago (TheStreet) -- Boeing beat Wall Street estimates as first-quarter net income gained 14% on the strength of increased commercial aircraft deliveries even as defense revenue fell. 

Net income excluding items was $1.76 a share. Analysts surveyed by Thomson Reuters had estimated $1.56. Revenue rose 8% to $20.5 billion. Analysts had estimated $20.2 billion.

Including items, net earnings declined to $965 million from $1.1 billion.

In premarket trading, Boeing shares were up $2.95 to $130.50.

"Disciplined execution across our production and development programs produced strong first quarter results," said CEO Jim McNerney in a prepared statement. "We measurably increased revenue, core operating earnings and cash flow, and expanded core operating margins.

"This financial and operational strength enabled the return of more than $3 billion to shareholders in the quarter through share repurchase and an increased dividend, even as we continued to invest in our future," McNerney said.

Looking ahead, Boeing increased full-year 2014 earnings guidance to between $7.15 and $7.35 a share from between $7 and $7.20. Analysts had been estimating $7.38 a share.

Boeing Commercial Airplanes first-quarter revenue rose 19% to $12.7 billion from $10.7 billion, reflecting higher 787 and 737 deliveries. Deliveries rose 18% to 161 from 137. During the quarter, the 787 program reached a 10 per month production rate. BCA booked 235 net orders during the quarter. Backlog remains strong with more than 5,100 airplanes valued at $374 billion.

Boeing Defense, Space & Security's first-quarter revenue was $7.6 billion, down from $8.1 billion. Operating margin fell to 10.2% to 10.3%. Boeing Military Aircraft revenue declined to $3.5 billion from $4 billion.

During the quarter, operating cash flow was $1.1 billion, up from $524 million, reflecting commercial airplane production rates, strong core operating performance and timing of receipts and expenditures.

Boeing repurchased 19.4 million shares for $2.5 billion, leaving $8.3 billion remaining under the current repurchase authorization expected to be completed over the next two to three years. The company also paid $500 million in dividends, reflecting a roughly 50% increase in dividends per share from the same period a year earlier.

At the end of the quarter, cash and investments in marketable securities totaled $12.2 billion, down from $15.3 billion at the start of the year, primarily due to the share repurchases and the pay-down of maturing debt. Debt was $8.9 billion, down from $9.6 billion at the start of the year, primarily due to maturities. Total company backlog at quarter-end was $440 billion.

Written by Ted Reed in Charlotte, N.C.

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