Boeing Co posted second-quarter profit and cash growth that beat analysts` estimates on Wednesday, even though sales were less than expected, sending shares up sharply.
The world`s biggest plane maker is cutting costs by streamlining production of new 737 MAX models and finishing development of other new planes. Rising profitability of its 787 Dreamliner contributed about $530 million in cash in the quarter.
Boeing shares jumped nearly 4 percent at $220.65 in premarket trading. The stock has soared 37 percent this year.
Analysts focused on Boeing`s abundant cash from operations, which at nearly $5 billion in the quarter was roughly double estimates of about $2.5 billion.
"Monster cash flow," said analyst Robert Stallard at Vertical Research. The results were "about as close to perfect as it gets from Boeing," he added.
Military aircraft sales fell 4 percent to $6.8 billion, but profit jumped 50 percent and margins widened 4.6 percentage points.
The extra cash allowed Boeing to add $1.5 billion to its operating cash flow forecast for the year, raising it to about $12.25 billion. Boeing will increase share buybacks this year by $3.5 billion, to about $10 billion. And it will make $3.5 billion in additional pension contributions this year to reduce future costs.
Boeing said it will cut full-year capital expenditure by $300 million, but that was expected since the company has made most of the big investments in its 777X wing factory and the 737 MAX and 787-10 programs, said analyst Richard Aboulafia at Teal Group.
The company lifted its full-year forecast for core earnings, which exclude some pension costs, by 75 cents to between $11.10 and $11.30 a share, its second upward revision this year.
Boeing swung to a profit of $1.76 billion, or $2.89 per share, in the second quarter, from a loss of $234 million, or 37 cents per share, a year earlier.
Last year`s results included more than $2 billion in charges related to the 787, 747 and KC-46 tanker aircraft programs.
Core earnings, which excluded some pension and other costs, were $2.55 per share in the quarter.
Revenue fell 8.1 percent to $22.74 billion.
Analysts expected core earnings of $2.30 per share on revenue of $23 billion, according to Thomson Reuters I/B/E/S.
(This article has not been edited by Zeebiz editorial team and is auto-generated from an agency feed.)