Boeing cuts forecast for defence unit’s margins
Shares of the world’s biggest aircraft maker fell 2.2% after it forecast a 2018 operating margin of 10%-10.5% in its defence business
Boeing reported better-than-expected profit and revenue on Wednesday, but cut the full-year forecast for its defence business’s margins, citing $426m in higher costs on its long-delayed KC-46 aerial refuelling tanker programme. Shares of the world’s biggest aircraft maker fell 2.2% after it forecast a 2018 operating margin of 10%-10.5% in its defence business, down from its previous outlook of 11%. "Management has previously expressed confidence that there would be no more tanker charges, and yet they keep coming," Robert Stallard, an analyst at Vertical Research Partners, said in a research note, adding that the KC-46 programme should "get less bad from 2019". "Investors have generally shrugged off prior issues in defence — but when they result in Boeing leaving its earnings and cash forecast unchanged, that’s not good," Stallard said. Boeing sees 2018 core earnings of $14.30 to $14.50 per share, unchanged from the same period last year, but below the Wall Street estimate of $14.56...
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