By Alwyn Scott and Sagarika Jaisinghani
(Reuters) - Boeing Co
Core earnings, which exclude pension and other costs, rose 12 percent to $1.97 per share from $1.76 a year earlier. Analysts polled by Thomson Reuters I/B/E/S expected $1.81 a share.
But free cash flow, a closely watched figure, swung to a negative $486 million in the quarter from a positive $615 million a year ago. Boeing cited spending on factories and tooling for new aircraft models.
The figure prompted some analyst concern. "Boeing is perhaps learning the hard way that if you tell investors to focus on the cash flow, then you had better deliver it," RBC analyst Robert Stallard said in a research note.
Boeing reaffirmed its financial outlook, which includes producing more than $9 billion in operating cash flow this year. It also noted it spent $2.5 billion on share buybacks in the latest quarter.
A key tally of the cost of producing the 787 Dreamliner rose by $793 million, nudging the total deferred cost balance to $26.9 billion. Investors use the figure as a gauge 787 production efficiency.
Profit margins in the commercial airplane business slipped to 10.5 percent from 11.8 percent, but remained above Boeing's target for the year of 9.5 percent to 10 percent.
Net income rose to $1.34 billion, or $1.87 per share, from $965 million, or $1.28 per share, a year earlier.
Revenue jumped 8 percent to $22.15 billion, as the company delivered 184 commercial aircraft, a 14 percent increase from a year ago. That helped drive revenue for the commercial airplane business up 21 percent to $15.4 billion.
Adjusting for a pension-related expense a year ago, profit per share rose 19 percent.
In premarket trading, Boeing shares were trading at $151.50, down from $153.33 on Tuesday.
(Reporting by Sagarika Jaisinghani in Bengaluru and Alwyn Scott in Seattle; Editing by Savio D'Souza, Jeffrey Benkoe)
