NEW YORK - Boeing reported its first quarterly loss in nearly seven years Wednesday, but its shares jumped as it confirmed its target for 2016 plane deliveries, saying the commercial aircraft market remains strong.
Boeing lost $234 million for the quarter ending June 30, 2016
The US aerospace giant lost $234 million for the quarter ending June 30, its first loss since the third quarter of 2009. Boeing made $1.1 billion in the year-ago period.
But the loss, caused largely by $2.1 billion in charges that the company warned of last week, was smaller than analysts expected.
Other aspects of the report also topped forecasts, buoying the company's shares. Revenues edged up nearly one percent to $24.8 billion, about $800 million more than forecasts.
Analysts said some key profit-margin metrics also bested expectations once one-time items were removed.
"The underlying operating performance of the company remains solid, with our commercial and defense teams again delivering strong revenues and operating cash flow," said Boeing chief executive Dennis Muilenburg.
Boeing shares were up 1.0 percent at midday to $136.24, making it one of the best performers in the Dow.
Boeing's warned last week of the large unexpected charges, including $393 million in elevated costs associated with the KC-46 military tanker program.
The company charged off $847 million after deciding not to upgrade two Boeing 787s that had been used in flight and ground testing.
And it booked $814 million in costs due to a slower production schedule for its 747-8 cargo plane.
The loss prompted Boeing to trim its full-year earnings forecast. However, Boeing confirmed other key targets, including its revenue outlook.
Muilenburg said the commercial airline market remains robust, pointing to an order book worth $11 billion and noting that plane cancelation and deferrals remain low due to heavy airline demand.
Boeing's schedule to ramp up production of its 737 short- and medium-range aircraft is on track, but the company has more "work to do" to nail down orders for the larger 777 and 787 planes, Muilenburg said on a conference call with analysts.
Keeping to a brisk schedule to boost plane production is key to meeting mid- and long-term profit targets.
Muilenburg described the market for cargo planes remained "very tough" but said the company was working to secure more orders.