Boeing earnings up, but reports higher costs on tanker
Boeing reported a jump in second-quarter profits on 25 July due to higher commercial airplane deliveries but said costs on a closely-watched US Air Force (USAF) tanker contract had risen again.
The US aerospace giant reported net income of $2.2 billion, up 25.6%, while revenues rose 5.2% to $24.3 billion.
Boeing set aside $418 million in additional funds for the KC-46 tanker, a USAF plane that has repeatedly suffered cost overruns.
The latest cost increases were for incorporating changes into test and early-build aircraft and for additional expenses in late stage testing and certification. Boeing said it expects to deliver the first tanker to the USAF in October.
Boeing's commercial plane business prospered on an uptick in deliveries, as well as higher profit margins compared with the year-ago period as it increased production rates on its most popular offerings.
Boeing has benefitted from a multi-year surge in commercial jet demand as US carriers refresh their fleets and airlines in developing and emerging countries boost orders.
Boeing lifted its full-year revenue forecast to $97 billion - $99 billion, up $1 billion from the prior range. It projected slightly higher operating margins in commercial planes but slightly lower margins in defense.
Shares fell 2% to $351.00 in opening trading.
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