Boeing 1st-Quarter Profit Off 34%
Boeing’s profit fell 34% in the first quarter as aircraft deliveries slowed as a result of last year’s 69-day machinists strike, the Seattle-based company said Monday.
But Boeing’s chairman said the number of airline orders is encouraging as the airline industry rebounds from a recession.
First-quarter profit fell to $119 million, or 35 cents a share, from $181 million, or 53 cents, for the first three months of 1995.
Wall Street analysts had projected earnings averaging 42 cents a share for the period ended March 31. With the report below expectations, Boeing stock initially fell as much as $1.75 a share Monday, but it recovered to close unchanged at $80.75 a share on the New York Stock Exchange.
Boeing delivered 40 commercial jets during the first quarter, compared with 59 in the 1995 period. Deliveries were slowed because production was still recovering after the strike in the fourth quarter of 1995 by production workers represented by the International Assn. of Machinists and Aerospace Workers.
But in a sign of confidence, Boeing raised its quarterly dividend 12%, to 28 cents a share from 25 cents, payable on June 7 to shareholders of record on May 17.
A higher effective income tax rate, caused by the expiration of research and experimentation tax credits, also contributed to lower first-quarter earnings, Chairman Frank Shrontz said.
Partly offsetting the drop in earnings were lower research-and-development expenses and increased corporate investment income.
Research-and-development expenses fell to $293 million for the quarter from $404 million a year earlier. Research-and-development costs for all of 1996 are projected to be in the $1.2-billion range, compared with $1.3 billion for 1995.
Profit is expected to grow as the company speeds up its production from the current 18.5 airplanes a month to 22.5 late this year and 26.5 a year from now.
About 60 commercial airplanes are expected to be delivered in the second quarter; delivery of 215 is projected for the year. Total sales for 1996 are projected to be in the $22-billion range, compared with $19.5 billion for 1995, the company said.
W.R. Grace reported a 33.8% increase in first-quarter profit from a year ago, when earnings were held down by the costly ouster of its chief executive.
Including results from its discontinued health-care operations, the Boca Raton, Fla.-based chemical company reported net income of $63.6 million, or 65 cents a share, for the first three months of this year. A year earlier, it earned $47.5 million, or 50 cents a share.
City National reported a nearly 50% increase in earnings for the first quarter, partly as a result of its acquiring First Los Angeles Bank in December.
The Beverly Hills-based bank holding company reported net income of $15.9 million, or 35 cents a share, compared with $10.6 million, or 23 cents a share, for the first quarter of 1995.
At a Glance:
US West Media said first-quarter profit fell 80% to $3 million, or break-even on a per-share basis, from $15 million, or 3 cents, for the year-ago period. It was the first full period of results since the company’s parent, US West Inc., split into a cable business and a telephone business known as US West Communications Group.
ICN Pharmaceuticals reported a record first-quarter net income of $22 million, or 65 cents per share, up 29% from first-quarter 1995 net income of $17 million, or 57 cents a share.
