Boeing Co. said Wednesday it more than doubled its third-quarter profit, aided by a large tax benefit and strong operating results, but the aircraft maker and defense contractor said the results for the fall quarter were hurt by a strike by airplane assembly workers.
The company raised its estimates for earnings in both 2005 and 2006, but its stock fell more than 3 percent in early trading.
The quarter was the company's first under new Chairman and CEO Jim McNerney and was marred by a four-week strike by the International Association of Machinists and Aerospace Workers, which Boeing said hurt earnings by 25 cents to 30 cents a share and caused it deliver 21 fewer airplanes than planned.
Earnings for the July-through-September quarter were $1.01 billion, or $1.26 per share, up from $456 million, or 56 cents per share, a year earlier.
Results included a gain of 62 cents per share for tax settlements and adjustments and numerous other one-time items: a gain of 45 cents per share for the sale of its Rocketdyne unit, 6 cents per share of additional expense for share-based plans and a charge of 14 cents per share for post-retirement expense related to the sale of operations in Wichita, Kan., and Tulsa, Okla.
Analysts surveyed by Thomson Financial had estimated earnings of 80 cents a share. Thomson Financial did not immediately know the comparable number for Boeing. But it appeared the comparable Boeing number would fall well short of the Wall Street estimate.
Revenues fell 4 percent to $12.6 billion from $13.2 billion, reflecting the impact of the IAM strike and slower growth in its defense business.
Boeing raised its estimates for earnings to a range of $2.95 to $3.05 per share for 2005, up 20 cents per share, and between $3.10 and $3.30 per share in 2006, up 10 cents per share. It cited strong performance in its core businesses this year followed by higher commercial airplanes deliveries, revenues and earnings next year, offsetting the lower revenue growth in defense.
Boeing shares fell $2.44, or 3.6 percent, to $64.53 in morning trading on the New York Stock Exchange. Through Tuesday, its stock had been up about 29 percent in 2005.
Boeing's Seattle-based commercial airplanes unit delivered just 62 planes in the quarter, its lowest total for the period in a decade due to the strike that ended Sept. 29. The company now expects to deliver about 290 airplanes in 2005, down from its previous estimate of 320 but up from 285 in 2004. That ensures that rival Airbus SAS will outsell its U.S. rival for the third straight year.
The strike caused Boeing to lower its estimate for this year's revenue to $55 billion; analysts had been estimating it at $57.1 billion. Third-quarter revenue was up 6 percent to $4.9 billion in the commercial airplanes division and down 11 percent to $7.4 billion in the defense business due to what the company called the timing and mix of aircraft deliveries, lower missile sales and the Rocketdyne divestiture.
Operating margins rose to 6 percent from 3.9 percent in the quarter, underscoring what McNerney said was the company's operating strength.
"Although we faced some challenges this quarter, Commercial Airplanes continued its tremendous sales success, completed firm configuration of the 787 Dreamliner and reached an agreement with the IAM that supports continued growth and competitiveness," he said. "At the same time, Integrated Defense Systems delivered strong margins."
McNerney took over July 1 as Boeing's third CEO since December 2003, hired to restore stability at the top to a corporation shaken by the scandal-hastened departures of predecessors Phil Condit and Harry Stonecipher.
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