Boeing cruises past forecasts as margins, sales grow

Boeing Co's profit jumped by more than half in the first quarter, surging past Wall Street forecasts, and strong sales of commercial jets led it to raise its forecasts for cash flow and earnings after a record 2017.

After fellow manufacturer Caterpillar Inc unnerved stock markets by warning of rising metals prices on Tuesday, the world's biggest planemaker said in its quarterly results on Wednesday that margins had improved at the start of 2018.

Core earnings, which exclude some pension costs, jumped to $3.64 per share from $2.17 per share a year earlier, dwarfing a consensus forecast of $2.58 per share according to Thomson Reuters I/B/E/S. Shares jumped more than 2 percent in response.

“Well it's not every day that a mega cap company beats consensus by 40 percent. In normal circumstances we would expect a very positive share price response,” Vertical Research Partners Robert Stallard wrote in a note.

Boeing sold a record 763 aircraft last year and has already announced a rise in commercial deliveries in the first three months of the year. It raised its full-year operating cash flow forecast to $15.0 billion-$15.5 billion from about $15 billion, previously.

The company also increased its 2018 core earnings per share forecast to $14.30-14.50 from its previous projection of $13.80-$14.00.

Core operating margin rose to 10.7 percent from 8.5 percent a year earlier while revenue rose 6.5 percent to $23.38 billion, beating expectations of $22.26 billion.

The results follow those of heavy equipment maker Caterpillar, whose shares tumbled on Tuesday after the company cautioned it would not have the same pricing power to pass on increased costs of material such as steel.

US President Donald Trump's crackdown on steel and aluminium imports, with tariffs of 25 percent for some steel products and 10 percent for aluminium products, has constrained supplies in the domestic market, inflating costs of the metals.