Boeing (NYSE: BA ) is weighing on the Dow Jones Industrial Average (DJINDICES: ^DJI ) today after some surprising charges in its earnings. S&P 500 (SNPINDEX: ^GSPC ) and the stock market in general are higher after Apple (NASDAQ: AAPL ) reported positive earnings after the market close yesterday. As of 1:30 p.m. EDT the Dow was down 36 points to 17,076. The S&P 500 was up three points to 1,986.
Earnings are moving the stock market today, as there were no U.S. economic releases. The biggest mover on the Dow today is Boeing, down 2.6%. Earnings rose 52% year over year to $2.24 per share, beating analyst expectations of $2.01 per share. Revenue was rose to $22.05 billion, up 1.1% year over year but below analyst expectations of $22.23 billion, after the company delivered a record 181 aircraft for the quarter. Boeing also announced it purchased $1.5 billion worth of shares in the quarter and upped its earnings guidance for the year to $7.90-$8.10 per share, up from $7.15-$7.35 per share. So why is Boeing down?
Boeing's earnings included a $272 charge for the development of the KC-46 refueling tanker, part of a $52 billion fixed-price contract with the U.S. Air Force. During its development, the KC-46 program experienced some $700 million in cost overruns. Last quarter, management assured investors this program, while facing some challenges, was on schedule. The increased costs were to keep the plane on schedule. RBC Capital Markets analyst Robert Stallard wrote, "To us it is worrying that Boeing is booking a charge of this magnitude at a relatively early stage in this long-term program, particularly given recent assurances from management that everything was going to plan."
It's not all gloomy, though. The S&P 500 hit an intraday record of 1,989 as Apple and the health care sector propelled the market higher.
Apple is up 2.8% after reporting earnings of $1.28 per share, up 19% from the year-ago quarter's $1.07 and better than analyst expectations of $1.23 per share. Revenue was $37.43 billion, up from $35.52 billion a year ago and above analyst expectations of $37.98 billion. The positive earnings have analysts raising their estimates, with some saying the stock could rise a further 20%.
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