Boeing Co (NYSE: BA) Reports Consecutive Increase in Quarterly Profits; up by 18% in Q3

The Chicago-based aircraft company Boeing Co. (NYSE: BA) reported a rise in profits by up to 18% in the third quarter, reflecting a high demand for commercial aircrafts as well as an increase in overall profitability from defense wing of the business.

Boeing Co. (NYSE: BA) has had a great fiscal year, with profits reaching new heights every quarter. However, shares did not reflect positively amid the news of the higher profit margin. Boeing Co. (NYSE: BA) shares dropped in value by 1.5% in trade today. According to analysts, this drop in share value stems from the insignificance of the rising profits, as increase in profits is natural, considering the demand for aircrafts in the market. What investors are concerned about, analysts say, is the constantly increasing cost of the aircraft 787 Dreamliner, the company’s trademark aircraft.

However, yearly statistics indicate a better performance by Boeing Co. (NYSE: BA) Last year, at the end of the third quarter, the company garnered $1.16 billion in share revenue, with a per share value of $1.51. This year, around the same period of time, the company generated $1.36 billion in share revenue, with a per share value of $1.86.

Core earnings reported by the company topped analyst forecasts. Excluding pension as well as other costs, Boeing Co. (NYSE: BA) reported core earnings of $2.14/share, topping both last year’s figure of $1.80/share, as well as analyst forecast figure of $1.97/share. The overall revenue reported by the company has risen by 7%, to $23.78 billion.

Boeing Co. (NYSE: BA) also reported an increase by 9% in aircraft deliveries for commercial use, to 186 in total. However, this does not make a positive impact on the overall outlook of the company, as operating profit margins have fallen from 11.6% to 11.2%. This fall reflects the increase in costs of the 787 as well as 747 aircrafts.

According to Joseph Nadol, a JPMorgan analyst, such cash losses incurred on the sale of the 787 aircrafts “could dampen the stock reaction.” This held true this morning, when the Boeing (NYSE: BA) shares declined in value by 1.5%, to $125.16, at the NYSE.

The deferred higher production costs of the 787, compensated for by only a small rise in cash-flow of Boeing Co. (NYSE: BA), will only “increase the bear calls,” says Sterne Agee analyst, Peter Arment. However, according to Peter, cash flows of the company are set to improve by next year.

According to Boeing Co. (NYSE: BA), core earnings for the operating year 2014 will be in between $8.10 to $8.30 on every share. These figures are higher than those previously forecasted, which placed the core earning in between $7.90 and $8.10.

Boeing Co. (NYSE: BA) has been apt in doing business so far this year. In its defense business, sales figures dropped by 2%, as governments all over decided to cut spending on defense budgets. However, Boeing increased its profit by 27% still, by cutting down on costs incurred in the development of defense aircrafts.

Boeing Co. (NYSE: BA) spent approx. $1 billion on the repurchasing of shares, and an additional $500m in way of dividends.

Revenue forecasts of the company remain unchanged, with the figure estimated in between $87.5-$90.5 billion.