Boeing stock rose more than 4% on Wednesday after the aerospace posted better-than-expected quarterly earnings and forecast profit growth next year despite weak demand.
With orders for new jetliners slowing sharply after peaking in 2014. Boeing and rival Airbus have focused on streamlining factories to lower costs and drive profits. That strategy appeared to pay off in Boeing’s fourth quarter as it reported earnings of $2.47 per share, topping analysts estimates of $2.32 per share.
For revenue, Boeing generated $23.3 billion against analysts’ expectations of $23.1 billion. Earnings would have been roughly $0.30-$0.35 higher but for a $312 million charge related to the KC-46 Pegasus military tanker.
On news of the results, Boeing shares climbed 4.2% to $167.36 in trading Wednesday.
“With solid fourth quarter operating performance and a sharp strategic focus, we extended our aerospace market leadership in our centennial year and positioned Boeing for continued growth and success in our second century,” Boeing CEO Dennis Muilenburg said in a news release.
As The Motley Fool reports, the company had a tough year in 2016 as it took special charges in several different lines of business while sinking demand for the Boeing 777 forced Boeing to renege on a commitment to keep production rolling at a rate of seven aircraft per month through the transition to the next-generation 777X.
In the fourth quarter, revenue from defense aircraft fell by 18% but revenue from commercial deliveries rose 1%. “Boeing expects to deliver between 760 and 765 commercial aircraft in 2017, topping 748 deliveries in 2016, likely enough to keep the title of world’s biggest plane maker,” Reuters said.
The company now forecasts 2017 core earnings of $9.10 to $9.30 a share, which exclude some pension and other costs, up from $7.24 in 2016. It also expects to generate a record $10.75 billion in operating cash this year, up from a record $10.5 billion in 2016.
“Our team is intent on accelerating productivity and program execution to deliver increasing cash and profitability,” Muilenburg said.