Boeing’s second-quarter loss, tied to Dreamliner charge, beats analysts’ predictions

Dennis Muilenburg, president and CEO of the Boeing Company, speaks Friday, July 15, 2016, during a ceremony marking the 100th Anniversary of the Boeing Co., in Seattle. (AP Photo/Ted S. Warren)

Boeing Co. on Wednesday reported a second-quarter loss of 44 cents per share on revenue of $24.8 billion, beating analysts’ expectations despite a $2.05 billion charge the company announced last week related in part to its 787 Dreamliner program.

Analysts had predicted a loss of 92 cents per share. All told, the aerospace giant recorded a $419 million loss for the quarter compared with a nearly $1.7 billion gain for the same period a year ago. Operating cash flow declined by 2 percent year-over-year to $3.2 billion.

“The underlying operating performance of the company remains solid with our commercial and defense teams again delivering strong revenues and operating cash flow,” Dennis Muilenburg, Boeing’s chairman, president and CEO, said in a statement. “Actions taken during the quarter that impacted our earnings were the right, proactive steps to reduce risk and strengthen our position for the future. Our strong cash generation also supported our ongoing commitment to invest in product innovation and in our people, and return substantial cash to shareholders through stock repurchases and dividends.”

Boeing’s $2.05 billion earnings hit was partly due to the company’s decision to refurbish and sell its last two 787 test jets. The accounting charges also involve the 747-8 air cargo and KC-46 aerial tanker programs.

Boeing had planned to sell the two seven-year-old 787 Dreamliners after refurbishing and modifying them for commercial use. Scuttling that plan resulted in a charge of $847 million. The costs are being written of as research and development expenses.

“As we look forward to the second half of the year, we anticipate continued strong operating performance across our production and services programs on generally healthy demand for our broad portfolio of market-leading offerings,” Muilenburg said in a statement. “Our commercial airplane development programs remain on track and we have successfully completed the flight testing required for customer approval of key KC-46 production milestones.”

Per-share guidance for guidance for the full year has been adjusted to between $6.40 and $6.60 from $8.45 and $8.65 to reflect the impact of the 787 R&D reclassification and the 747 and Tanker charges, solid performance and tax benefits, the company said.

The 787 test jets were made at Boeing’s commercial aircraft manufacturing hub in Everett, Wash. Boeing also assembles the 787 in North Charleston, where the first South Carolina-made Dreamliner rolled out of the hangar in April 2012.

Reach David Wren at 843-937-5550 or on Twitter at @David_Wren_