The tanker stumble marred an otherwise strong quarter for Boeing, with profit and sales exceeding Wall Street’s estimates. The company’s strong cash generation has made it one of the top performing U.S. industrial stocks for more than a year.
For an updated story, see “Another big charge for the tanker mars Boeing’s strong quarter for commercial jets.”
Boeing reported a $418 million blow from additional costs as it prepares to deliver the first of its delay-plagued aerial tankers to the Air Force, rattling investors accustomed to smooth sailing from the world’s largest planemaker.
The latest tanker writedown covers the cost of retrofitting eight aircraft in various stages of production with upgraded software and other enhancements that resulted from flight-testing, Boeing said in a statement Wednesday as it reported earnings. The company had already amassed $3 billion in charges developing the aerial refueler based on its 767 jetliner.
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The tanker stumble marred an otherwise strong quarter for Boeing, with profit and sales exceeding Wall Street’s estimates. The company’s strong cash generation has made it one of the top performing U.S. industrial stocks for more than a year, but the ascent has slowed in recent months as tariffs imposed by President Donald Trump have fueled trade tensions and threatened to dent Boeing’s order book.
“Trade and tariff risks have kept sentiment on BA stock recently in check,” Canaccord Genuity analyst Ken Herbert said in a report Tuesday, referring to Boeing by its stock ticker.
The shares fell 3.4 percent to $346 before regular trading in New York. Boeing advanced 21 percent this year through Tuesday, the third-biggest gain on the Dow Jones industrial average.
Adjusted earnings rose to $3.33 a share, exceeding the $3.27 average of estimates compiled by Bloomberg. Revenue climbed 5 percent to $24.3 billion. Analysts had predicted $24 billion.
The Chicago-based company generated free cash flow of $4.3 billion, topping estimates of $2.1 billion, another sign its underlying business remains healthy.
Boeing expects to deliver the first of the KC-46 aircraft to the U.S. Air Force in October, more than two years behind schedule.
The manufacturer has finalized its design for the complex tankers, part of a potential $44.3 billion program, after wrapping up flight-testing earlier this month. Boeing has wrestled with a handful of technical issues, including the plane’s 59-foot extended boom accidentally scraping the protective coating off military airplanes refueling in midair.