Boeing's first quarter earnings beat expectations

Boeing unveiled a 20 per cent rise in first quarter earnings on Wednesday that beat analysts' estimates despite grounding its 787 Dreamliner fleet after batteries overheated.

The planemaker reported net income of $1.1bn for the first three months of the year, compared to $923m the year before.

Earnings per share climbed 18% to $1.44 from $1.22.

The results showed little impact from the Dreamliner problems. Boeing was forced to ground its entire fleet after batteries in two of its jets overheated.

The company has reassured investors that it expects to deliver all the jets it had planned, including Dreamliners which could be ready to be flying again in less than a week.

However, a halt in Dreamliner deliveries saw revenues fall 2.5% to $18.9bn during the quarter.

"Strong core operating performance fuelled by productivity gains and solid programme execution drove higher company earnings and double-digit operating margins in both major businesses during the quarter," said Boeing Chairman, President and Chief Executive Officer Jim McNerney.

"Commercial Airplanes worked around the clock to resolve the 787 battery issue while also successfully increasing production rates on the 737 and 777 programmes. Defense, Space & Security continued to perform exceptionally well, meeting tough affordability goals while investing in future growth."

The estimated costs of the Dreamliner issues were not released in the statement.

Analysts do not anticipate the costs of fixing the Dreamliner to be substantial compared with the $20bn expense of developing the jet and the $120bn in estimated costs for its initial production run.

McNerney said the company's first priority in the days ahead was to restore the 787 fleets to service and resume production deliveries.

"Our outlook for the year is positive, and our financial and delivery guidance is reaffirmed as we remain focused on the profitable ramp up in commercial airplane production rates, disciplined execution of our development programs, and continued growth in core, adjacent and international defense and space markets."

RD