Boeing Co on Wednesday reported a quarterly loss as it took $1.1 billion of previously announced charges to settle government investigations into its defence unit and to cover the costs of delayed surveillance aircraft.
The Chicago-based company, which is outselling its European commercial aircraft rival Airbus more than two-to-one this year, cut its full-year earnings forecast to account for the charges, but raised forecasts for next year on strong plane sales.
Its shares dropped slightly in pre-market trading. Boeing reported a loss of $160 million, or 21 cents per share for the second quarter, compared with a profit of $566 million, or 70 cents per share, in the year-ago quarter.
Revenue rose 2 percent to $15 billion. That was in line with Wall Street's forecast of a loss of 21 cents per share on revenue of $14.96 billion, according to Reuters Estimates.
"Everything was very much as we anticipated," said Paul Nisbet at aerospace specialists JSA Research, pointing to further evidence of Boeing's booming plane business. "When you have a lot of orders, you have a lot of down payments."
The loss came after a $615 million settlement with the US Department of Justice, announced last month, to end two high-profile criminal investigations into Boeing's hiring of a former top Air Force weapons buyer and its appropriation of thousands of Lockheed Martin Corp rocket program documents. After reserves, it said it took a $571 million charge for the settlement.
Boeing also took a charge of $496 million to cover the extra costs of delayed surveillance aircraft being produced for Australia and Turkey. Last month, the company said it would take a charge of $300 million to $500 million for the delay.
Because of the loss, the company cut its 2006 earnings forecast to between $2.40 and $2.55 per share. Wall Street was expecting $2.54 per share, on average.
However, due to surging demand for its planes, especially from Middle Eastern and Asian airlines, Boeing raised its 2007 profit forecast to a range of $4.25 and $4.45 per share. Wall Street was expecting $4.48 per share, on average.
The company said it had a record $220 billion of work in its backlog, up from $213 billion at the end of the last quarter. Boeing's commercial airplane unit accounted for $141.7 billion of that.
Last year Boeing reported a record 1,002 net commercial jet orders, including many for its popular new mid-sized, long range 787 Dreamliner, most of which is made from carbon composites and titanium to save weight and cut fuel consumption.
So far this year the company has 510 firm plane orders on its online order book, after a flurry of orders last week at Britain's Farnborough air show last week. Airbus has firm orders for 207 planes for the year.
Boeing shares were trading at $82.76 on the Inet electronic brokerage system, down from a close at $83.75 on the New York Stock Exchange on Tuesday. The shares are up about 20 percent in the last six months, hitting an all-time high in May. The Standard & Poor's Aerospace and Defence index is up about 12 percent over that time, boosted by a boom in travel and record US defence spending. The S&P 500 index is down slightly over the last six months.
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