Boeing set a new record for commercial aircraft deliveries in the third quarter but its shares dropped more than 3% as two key businesses saw declines in revenue.
The aerospace giant on Wednesday also announced a further $329 million in charges on the troubled KC-46 military tanker aircraft program, raising the total hit, after taxes, to $1.9 billion so far.
“The next generation tanker, one of Boeing’s most important projects outside its core commercial aircraft operations, was awarded in 2011 and has had a series of technological and production problems,” The Financial Times reported. “It is running more than a year behind the original schedule.”
Revenue from the commercial aircraft business dropped 1% to $15 billion while revenue from defense, space, and security fell 5% to $5.5 billion.
In trading Wednesday, Boeing stock was down 3.1% at $257.72. It had been climbing steadily this year, up over 70% as of Tuesday’s close
Overall, Boeing earned $2.72 per share on revenue of $24.3 billion, beating analysts’ expectations of EPS of $2.66 on revenue of $23.9 billion. During the third quarter, it delivered a record 202 commercial aircraft as it increased production of the 737 MAX jet. The backlog of commercial aircraft orders is nearly 5,700, or $474 billion.
The company also again raised its forecast for full-year earnings thanks to lower-than-expected tax rates, lifting guidance to a range of $9.90 to $10.10 per share from $9.80 to $10.00.
“Our teams across all three business segments are driving execution with a focus on both productivity and growth, which has enabled Boeing to deliver solid third quarter financial results, grow cash flow, and raise our 2017 outlook,” CEO Dennis Muilenburg said in a news release.
The commercial aircraft deliveries in the third quarter included 24 737 MAXs. Muilenburg also noted that Boeing successfully launched its newest business segment, Boeing Global Services, “to offer complete life-cycle support across the commercial, defense and space sectors.”
On the defense side, Boeing booked $6 billion in new orders, including an initial contract award for the Ground Based Strategic Deterrent program.