Boeing 1st-Quarter Loss Narrows
Boeing Co. said Wednesday that its first-quarter loss narrowed as strong sales in its defense unit helped offset a hefty accounting charge and continuing slump in the commercial aircraft business.
The world’s largest aircraft maker posted a loss of $478 million, or 60 cents a share, mainly reflecting an $818-million charge to write down declining goodwill value of companies it acquired in the 1990s. In last year’s first quarter, Boeing reported a $1.2-billion loss, or $1.54 a share, after taking a $1.8-billion charge for goodwill.
Revenue in the first quarter fell 11% to $12.3 billion from $13.8 billion a year earlier.
The commercial aircraft market remains “highly challenging while our defense markets remain strong,” Boeing Chairman Phil Condit said in a conference call with analysts.
Boeing, although headquartered in Chicago, is the largest private employer in Southern California, with about 35,000 workers at area facilities stretching from Palmdale and Canoga Park to Long Beach and Anaheim.
Excluding charges, Boeing earnings were $540 million in the first quarter, down 40% from $902 million a year earlier.
The first-quarter results were better than what some analysts expected. In New York Stock Exchange trading, Boeing shares rose 34 cents to $28.14.
Boeing said new aircraft deliveries fell 35% to 71 in the quarter from 110 in the year-earlier period as airlines, many suffering from a severe downturn in air travel, canceled or delayed orders.
On the other hand, first-quarter earnings at its Integrated Defense Systems business increased 49% to $603 million as Boeing accelerated deliveries of military aircraft, including one C-17 transport jet and two F/A-18 E/F Super Hornet fighter jets.
Boeing assembles the C-17 aircraft at its sprawling facilities in Long Beach, while subcontractor Northrop Grumman Corp. builds major components for the F/A-18 in El Segundo.
“This was a great quarter” for the defense unit, Condit said, noting how in its military aircraft business operating margins -- a key barometer of profitability -- rose to 14.2% from 13.3% in the year-earlier quarter.
In comparison, the commercial aircraft operation eked out a 4% operating margin in the latest quarter.
“Commercial aircraft earnings were very much as expected,” said Paul Nisbet, an aerospace analyst with JSA Research Inc. “But the defense business was unusually strong, stronger than anticipated.”
Boeing’s results mirrored similar earning reports from other defense companies in the last week.
Both Lockheed Martin Corp. and Raytheon Corp. on Tuesday reported strong earnings from their defense businesses, which have benefited from a sharp uptick in spending for military hardware after the Sept. 11 terrorist attacks.
The renewed focus on defense is helping Boeing, which reported that revenue from its defense business made up 51% of total revenue in the first quarter, compared with 46% for commercial aircraft.
