Boeing Q1 profit jumps 13%

Boeing reported Wednesday first-quarter earnings rose 13 percent from a year ago, benefiting from a sharply lower tax rate that helped to offset a dip in sales. The US aerospace and defense giant posted net income of $586 million compared with $519 million in the 2010 first quarter. Earnings per share rose 11 percent to 78 cents, topping the average analyst forecast. Revenues for the Chicago-based company slipped 2.0 percent to $14.91 billion, missing expectations. "We're off to a good start in an important year for our company," Jim McNerney, Boeing chairman, president and chief executive, said in a statement. "We delivered strong operating performance, made significant progress on 787 and 747-8 flight testing, and scored a major win on the US Air Force Tanker program," he said. Boeing's earnings from operations fell 15 percent, squeezing its operating margin to 6.7 percent compared with 7.7 percent a year earlier. But the company said its effective tax rate dropped to 33.4 percent in the first quarter from 50.6 percent in the year-ago period, which had included a $150 million charge on health-care legislation. Boeing reported paying $295 in taxes, down from $531 million. Boeing reaffirmed its 2011 financial outlook "reflecting solid core operating performance, higher pension expense, planned deliveries on development programs and the current defense contracting environment." It forecast full-year profit of $3.80 to $4.00 per share and revenues of $68 to $71 billion. Boeing, which more than doubled full-year earnings in 2010 despite a sharp fall in commercial aircraft sales in the final quarter, reported continued pressure in the segment but a "strong" order backlog. Commercial Airplanes first-quarter revenue fell 5.0 percent to $7.12 billion as 777 deliveries dropped. Operating margins fell to 7.2 percent from 9.1 percent a year ago reflecting a 4.0 percent drop in deliveries, to 104 airplanes, and higher research and development investment, the company said. Boeing said flight testing in the delay-plagued 787 Dreamliner program and the 747-8 program was progressing. It confirmed the first delivery of the 787 to launch customer All Nippon Airways was expected in the third quarter, three years behind the initial schedule, and the first delivery of the 747-8 Freighter is set for mid-2011. Boeing booked 153 orders for aircraft in the period and removed 47 others, leaving net orders at 106, up from 83 a year earlier. "Backlog remains strong with over 3,400 airplanes valued at $263 billion," it said. Boeing's defense arm ended the quarter flat compared with a year ago, despite a 5.0 percent rise in military aircraft revenue. Boeing Defense, Space & Security's first-quarter revenue was $7.6 billion, while the operating margin increased a tenth point to 8.8 percent. Boeing shares rose 0.6 percent to $76.00 dollars in pre-market trade in New York.