Boeing (BA) Looks to Stem Large Headwind with Proposed Accounting Change
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Boeing (NYSE: BA) may alter pension accounting methods moving forward as it looks to become more transparent and regain investor confidence.
Last month, the aerospace giant reported a 6 percent drop in profit, with EPS being hit 18 cents on higher expenses tied to retirement plans.
At an investor event today, CFO Greg Smith said the the company might shift to a mark-to-market method of pension accounting, which is gaining further traction among a wider range of U.S. industrial groups. Those that are for the method say that accounting is more transparent due to significant gains and losses being recognized annually instead of being spread out over time. Those against note that earnings reports could become more volatile on the change. A decision on the matter is expected in January.
Some peers already using the mark-to-market method include UPS (NYSE: UPS), Johnson Controls (NYSE: JCI), Honeywell (NYSE: HON), and more. Shares of Boeing are modestly higher Tuesday.
Last month, the aerospace giant reported a 6 percent drop in profit, with EPS being hit 18 cents on higher expenses tied to retirement plans.
At an investor event today, CFO Greg Smith said the the company might shift to a mark-to-market method of pension accounting, which is gaining further traction among a wider range of U.S. industrial groups. Those that are for the method say that accounting is more transparent due to significant gains and losses being recognized annually instead of being spread out over time. Those against note that earnings reports could become more volatile on the change. A decision on the matter is expected in January.
Some peers already using the mark-to-market method include UPS (NYSE: UPS), Johnson Controls (NYSE: JCI), Honeywell (NYSE: HON), and more. Shares of Boeing are modestly higher Tuesday.
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