The Boeing Company (BA) has posted a third quarter loss of $1.6 million or $2.23 per diluted share, worse than the Zacks Consensus Estimate of a loss of $2.12 per share. Last year, the company reported a net income of $695 million or 96 cents per share.

Earnings in the quarter were affected due to reclassification to research and development of costs for the first three 787-series test airplanes incurred in July ($2.46 per share) as well as in August and September (14 cents per share). The company also digested a charge of 99 cents per share from the delay in producing a new version of the 747-8 series freighter jet leading to late design changes.

On the other hand, revenues rose 9% to $16.7 billion from $15.3 billion in the year-ago period. The upside came from increased military aircraft deliveries and higher volume in services in its Integrated Defense Systems business. Its Commercial Airplanes segment improved on higher deliveries. Commercial Airplanes revenues had been affected in the year-ago period due to labor strikes and supplier production problems.

Boosted by 96 gross orders during the reported quarter, Boeing’s commercial aircraft backlog stood at $254 billion. Integrated Defense Systems backlog, however, decreased slightly from $70 billion at the end of the first half of fiscal 2009 to $65.8 billion. The reduction in backlog was primarily due to the termination of the manned ground vehicle section of the Future Combat Systems contract.

Boeing reaffirmed its 2009 revenue guidance range of $68 billion – $69 billion and operating cash flow guidance of $2.5 billion. However, the company reduced its EPS guidance range for fiscal 2009 to $1.35 – $1.55 from the previous guidance range of $4.70 – $5.00. The revision was to reflect the 787 cost reclassification and 747 charge.

We maintain our market Neutral recommendation on the shares.

Zacks Investment Research
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