Boeing reported a revenue increase of 2 percent for the first quarter of the year, but took a hit due to charges connected to the KC-46 Pegasus tanker contract for the Air Force, executives announced on Wednesday.
Total revenue was $22.6 billion for the quarter, which is up from $22.1 billion one year ago. Earnings per share dropped from $1.97 last year to $1.83. Total net earnings dropped to $1.2 billion this quarter, down from $1.3 billion a year ago.
“The $156 million after-tax charge on [the tanker contract] primarily reflects the cost of incorporating engineering changes identified during testing into aircraft already built and in production, along with the certification of those changes,” said CEO Dennis Muilenburg. “To meet our commitment to deliver this much needed capability to U.S. warfighters and ramp up production on schedule, we are concurrently building production aircraft while we move through the remaining testing.
“Overall, we continue to make progress through the late stages of development and ongoing flight testing, with all four development test aircraft now in the air giving us confidence to make this investment,” he said.
The company’s defense sector saw an increase in operating margin from $6.7 billion in the first quarter of last year to $8 billion this first quarter. Orders included 20 contracts from the U.S. Navy for P-8A Poseidon aircraft, 117 AH-64 Apache attack helicopters for the Army and 15,000 joint direct-attack munition tailkits for the Air Force.
