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Earnings

Boeing Exceeds Expectations

Aviation: Earnings are up 23%, boosted by its military aircraft business and space and communications unit.

July 19, 2001|PETER PAE | TIMES STAFF WRITER

Boeing Co., the world's largest aerospace company, said Wednesday that second-quarter earnings rose 23% as its Seal Beach-based Space and Communications Group and its military aircraft business posted strong gains.

Profit from operations climbed to $804 million, or 95 cents a share, from $654 million, or 75 cents, a year earlier. Analysts had expected the company to report 91 cents a share.

As a result, Boeing shares rose 83 cents to close at $57.13 on the New York Stock Exchange after sliding 12% since last month's Paris Air Show, where the company disappointed investors by reporting lackluster orders for commercial aircraft.

Revenue rose 3.6% to $15.3 billion from $14.8 billion.

The space and communications unit saw revenue rise 40% to $2.52 billion, reflecting a growing business base from the acquisition of the Hughes satellite-making business last fall. The unit posted earnings of $130 million, compared with a loss of $24 million a year earlier, mainly because of a one-time charge of $34 million for a demonstration launch of a Delta III rocket.

The company's military aircraft business also fared well as revenue rose 6.5% and profit climbed to $410 million from $246 million a year earlier.

Sales of commercial aircraft, the company's largest business, fell nearly 6% to $9.32 billion, though earnings rose 8.3% to $955 million as profit margins grew to 10.2% from 7.6%.

Separately, Boeing lowered its forecast for deliveries of its commercial jets next year to 510 to 520 from 530 amid a general slowdown in orders. Further cuts could hurt future earnings, although strong growth in other businesses such as space and communications could offset the decline, analysts said.

Among other defense contractors reporting earnings Wednesday, Raytheon Co., the nation's third-largest defense contractor, posted a net loss for the second quarter despite higher sales after taking $184 million in charges against earnings.

But operating earnings rose to $117 million, or 33 cents per share, compared with $95 million, or 28 cents, a year ago. Sales rose 4% to $4.31 billion.

General Dynamics Corp., which is buying rival shipbuilder Newport News Shipbuilding Inc. for $2.6 billion, said second-quarter profit rose 11%. Profit from operations rose to $227 million, or $1.12 a share, matching estimates. Sales rose 13% to $2.96 billion.

United Technologies Corp. said second-quarter profit rose 16% on cost-cutting and strong sales of aerospace equipment. Net income rose to $588 million, or $1.16 a share, a penny above analysts' estimates. Sales rose 5.3% to $7.33 billion.

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