Boeing on Wednesday posted net third quarter earnings down six percent on a revenue increase of thirteen percent.
The company earned USD$1.03 billion in the third quarter, compared with USD$1.098 billion a year earlier. Revenue rose to USD$20.0 billion from USD$17.7 billion.
Boeing raised its full-year earnings forecast to a range of USD$4.80 to USD$4.95 a share, compared with USD$4.40 to USD$4.60 previously. It said revenue should reach USD$80.5 billion to USD$82 billion, driven by more sales in the military, space and security businesses. Total revenue in 2011 was USD$68.7 billion.
"Boeing is getting pretty good at this," Robert Stallard, an analyst at RBC Capital Markets, wrote in a note to clients. He called it "another trouble-free quarter with no execution issues."
The commercial aircraft business delivered 22 more jets in the third quarter than a year ago, due in large part to 787 deliveries, opening a second 787 assembly line, and ramping up output of 737 and 777 jets.
Boeing chief executive Jim McNerney said the company has delivered 28 787 Dreamliners so far this year.
The delivery increase drove revenue in the commercial airline business up 28 percent to USD$12.2 billion.
But Boeing earned less from the jets because many were newer aircraft, which tend to have lower profit margins. The business also earned less from aircraft services, which tend to have higher margins. Overall margins contracted to 9.5 percent from 11.4 percent.
The commercial aircraft business "was a little soft on the top line and slightly softer on the margin, but not as weak on margins as feared," said Ken Herbert, an analyst at Imperial Capital.
Boeing said that excluding pension costs, its earnings rose 5 percent from a year earlier. Factoring out the pension costs, earnings were USD$1.89, up from USD$1.80 a year ago.
The company said it expects pension expense to rise by USD$1 billion next year, to USD$3.5 billion.
Despite "pension headwinds," the defense, space and security business "maintained double-digit margins in a challenging environment, while commercial airplanes continued to build momentum with 787 deliveries and 737 MAX orders," Boeing CEO Jim McNerney said in a statement.
Defense revenue fell 4 percent to USD$7.8 billion in the third quarter, but margins improved to 10.5 percent from 10 percent. The higher margins surprised most analysts, but left questions about whether they can be sustained.
"I am encouraged by the improved margin trends," said Carter Leake, an analyst at BB&T Capital Markets. "But we'll see if these margins can be continued into 2013."
Analysts said they were focused on whether Boeing can continue accelerate delivery of 747 and 787 jets, which currently drag on the earnings, and get to the point where they are contributing to cash flow.