Boeing Co racked up a further $329 million charge for its troubled KC-46 aerial refueling tanker program in quarterly results on Wednesday, paring gains in profit margins compared to a year ago.
The world`s biggest maker of jetliners raised its full-year earnings and cash flow forecasts as it beat forecasts for earnings per share and reported margins rising in its main commercial airlines segment and overall business.
But the latest losses on the air tanker program, which some analysts had speculated could come back to haunt Boeing despite assurances to the contrary earlier this year, helped prod the company`s shares marginally lower in premarket.
Boeing shares are still up almost 70 percent this year.
"The overall result is very close to our expectations with only a small change to the full year guidance," analysts from research house Vertical Research Partners said in a note on the results. "(It is a) modest increase to 2017 guidance."
The costs of the troubled tanker program also weighed on Boeing results in the first quarter of this year and Chief Financial Officer Greg Smith said then that the cost would not recur in future quarters.
The company said the charges for the tanker program - split between $256 million for its commercial airlines business and $73 million for the defence unit - related to changes made to the aircraft as it progresses through late-stage testing.
Boeing has streamlined production, shed jobs and wound down development costs this year to dramatically improve profit and cash flow, as it competes with European rival Airbus SE amid burgeoning demand from airlines for more capable planes at lower prices.
Core operating margin rose to 9.8 percent in the third quarter ended Sept. 30, from 9.2 percent a year earlier.
The company raised its operating cash flow forecast for the full year to about $12.5 billion from its previous forecast of $12.25 billion and its 2017 core earnings per share forecast to $9.90-$10.10, from $9.80-$10.00, previously.
The rise in the full-year profit forecast was driven by a lower-than-expected tax rate, the company said.
A year ago it included a tax gain of 98 cents per share in the third quarter, driving a dip in core earnings for the same period this year to $2.72 per share from $3.51 per share.
Core earnings still beat average analysts` estimate of $2.66 per share, according to Thomson Reuters I/B/E/S.
Quarterly operating cash flow increased about 6 percent to $3.40 billion, and was higher than Street`s expectation of $2.83 billion.
Revenue rose 1.7 percent to $24.31 billion, beating estimate of $23.92 billion.
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