Boeing expects higher costs to hurt defense margins

(Reuters) - Boeing Co reported a better-than-expected profit on Wednesday, but cut its full-year forecast for margins in its defense business citing higher costs in the KC-46 aerial refueling tanker program.

Shares of the world's biggest planemaker fell 3 percent after the planemaker said it expects 2018 operating margin of 10 percent-10.5 percent in its defense business, down from its previous forecast of 11 percent.

The company raised it full-year revenue forecast, but kept its earnings per share and cash flow forecasts unchanged.

Core earnings for the second quarter were $3.33 per share in the quarter, beating the average analyst estimate of $3.26 per share, according to Thomson Reuters I/B/E/S.

 

Overall revenue rose 5 percent to $24.26 billion, also beating estimates, while commercial aircraft deliveries rose 6 percent to 194 aircraft.

For the full year, company said it expects revenue of $97 billion to $99 billion, compared with its previous estimate of $96 billion-$98 billion.

(Reporting by Ankit Ajmera in Bengaluru; Editing by Saumyadeb Chakrabarty)