Boeing profits jump but commercial air deliveries fall
Net income for the quarter ending March 31 rose 19 percent to $1.5 billion
NEW YORK (AFP) - Aerospace giant Boeing said Wednesday declining costs boosted earnings for the latest quarter, but revenues missed analyst expectations as commercial plane deliveries fell.
Net income for the quarter ending March 31 rose 19 percent to $1.5 billion.
But revenues fell 7.3 percent to $21 billion, below the $21.3 billion expected by Wall Street analysts. It was only the second time in 21 quarters the company underperformed in terms of revenues.
The firm has been trimming jobs in its civil aviation division due to slowing sales. Chief executive Dennis Muilenburg pledged to have a "sharp focus on performance and productivity" to reach its financial targets.
Boeing plans to cut hundreds of engineering jobs on June 23 and expects additional cuts by the end of the year. Since the start of 2017, it has eliminated 3,500 positions, or about 2.3 percent of its staff at the end of 2016.
"We are having to deal with a lot of competitive realities in the marketplace," Muilenburg said on a conference call.
While Boeing has experienced net job loss, it has been adding some technology-oriented positions out of recognition that "we need to fuel the research and development for the future," Muilenburg said.
Boeing delivered 169 commercial aircraft in the quarter, down seven from the same period of 2016. Commercial deliveries are closely scrutinized by Wall Street because of their connection to revenues.
Boeing modestly increased its full-year profit forecast by 10 cents a share to a range of $10.35 to $10.55, citing a lower-than-expected tax rate.
Muilenburg said he was encouraged that President Donald Trump had nominated two board members for the Export-Import Bank, which has been hamstrung due to a lack of a quorum following an effort by some in Congress to eliminate the bank.
Muilenburg called the nominations "a very big step" and said he was hopeful "that soon we ll see a fully operational board."
The Ex-Im Bank has sometimes been dubbed the "Bank of Boeing" because of its role in providing key financing to Boeing customers over the years to purchase aircraft.
Boeing shares fell 1.0 percent to $181.71 in midday trading.
