Boeing to take $536m tanker charge in second-quarter

Boeing said Friday that its second-quarter earnings will include a charge for additional costs to complete the huge KC-46A aerial refueling tanker program for the US Air Force.

The US aerospace giant said it would take an after-tax charge of $536 million, or 77 cents per share, that reflects higher estimated engineering and manufacturing costs while holding to the program schedule for initial production deliveries in 2017.

"While we are disappointed with this charge, we are investing the necessary resources to keep this vitally important program on schedule for our customer," said Dennis Muilenburg, Boeing president and chief executive, in a statement.

The Chicago-based company has committed to delivering 18 tankers to the air force by August 2017; a total of 179 tankers is due by 2027.

"We have a clear understanding of the work to be done, and believe strongly that the long-term financial value of the KC-46 program will reward our additional investment," Muilenburg said.

Boeing said it expected to adjust its 2015 earnings forecast to take account of the charge when it reports second-quarter financial results on July 22. But revenue and cash flow forecasts for the full year were expected to remain unchanged.

Shares in Dow member Boeing fell 1.4 percent to $146.38 in early trade on the New York Stock Exchange.