Business

January 30, 2013

Boeing focuses on 787 fix; fourth quarter profit tops estimate

Boeing said Jan. 30 that its top priority this year is fixing the battery problems that grounded its 787.

The company made the pledge while reporting a fourth-quarter profit that topped Wall Street estimates, as rising profits from commercial jets offset a smaller profit from defense work.

The 50 787s in service were grounded two weeks ago by global aviation regulators following two incidents involving the plane’s lithium-ion batteries, including a fire on a plane parked in Boston. Jan. 30, Jim McNerney, Boeing’s chief executive, said the company believes “good progress is being made” in narrowing down the possible causes. Still, Boeing is not making any predictions about how long the grounding will last and federal officials have said the investigation of the battery problems is still in the early stages.

Earlier, U.S. aviation officials said they have asked Boeing for a full operating history of the batteries on the 787s. Japan’s All Nippon Airways confirmed that it had replaced batteries on its 787 aircraft 10 times because they didn’t charge properly or connections with electrical systems failed. Japan Airlines also said it had replaced 787 batteries. Between them, the two airlines operate 24 787s.

In a statement, Boeing said that it has not “seen 787 battery replacements occurring as a result of safety concerns.”

Boeing is still building 787s even though deliveries are halted. It still aims to deliver at least 60 of the planes this year, and it’s on track to speed up production from five per month now to 10 per month by the end of the year, McNerney said on a conference call.

Boeing said it expects to deliver 635 to 645 commercial jets this year. That’s up from 601 deliveries in 2012, when Boeing delivered 46 787s and topped European rival Airbus for the first time since 2003. Airbus expects to deliver more than 600 planes this year.

Boeing earned $978 million in the latest quarter, or $1.28 per share. That was down 30 percent from a profit of $1.39 billion, or $1.84 per share, a year earlier, which included a big tax benefit of 52 cents per share.

The profit topped the $1.19 per share expected by analysts surveyed by FactSet.

Revenue rose 14 percent to $22.3 billion, matching analyst estimates.

Boeing Co. predicted 2013 earnings of $5 to $5.20 per share, with revenue of $82 billion to $85 billion. The outlook assumes “no significant financial impact” from the 787 being out of service.

Analysts had been expecting a 2013 profit of $5.17 per share on revenue of $88.13 billion.

For all of 2012, net income fell 3 percent to $3.9 billion, or $5.11 per share. Revenue rose 19 percent to $81.7 billion.

Last year’s deliveries of its new 787 as well as its revamped 747-8 brought in cash — the 787 lists for more than $200 million each — but they actually hurt profits because the planes cost more to build than what Boeing collects. Profit margins for commercial planes shrank slightly, even as revenue rose 32 percent to $14.16 billion in the fourth quarter, and profits rose 29 percent to $1.27 billion.

Boeing is also faced with a slowdown in its defense business. Defense profits fell 13 percent to $751 million in the fourth quarter. Defense revenue fell 2 percent to $8.34 billion.

The 787 is the first airliner to make wide use of lithium-ion batteries. They are prone to overheating and require additional safeguards to prevent fires.

Boeing said Jan. 30 that replacing batteries on a plane is not uncommon. It said batteries on the 787s are being returned because of safety mechanisms that make sure that batteries can’t be used if they have been deeply-discharged or improperly disconnected.

Some batteries have also been returned because they exceeded their shelf life, the company said.

 




All of this week's top headlines to your email every Friday.


 
 

 
U.S. Chamber of Commerce photograph

Boeing, Embraer to collaborate on ecoDemonstrator technology tests

U.S. Chamber of Commerce photograph Frederico Curado, president & CEO of Embraer, and Marc Allen, president of Boeing International, at the Brazil-U.S. Business Summit in Washington, D.C. The event occurred during an offici...
 
 
LM-Legion

Lockheed Martin’s Legion Pod™ takes to skies

Lockheed Martin photograph by Randy Crites Lockheed Martin’s Legion Pod recently completed its first flight test, successfully tracking multiple airborne targets while flying on an F-16 in Fort Worth, Texas. Legion Pod was in...
 
 

Raytheon wins U.S. Army contract award

Will provide R&D for ground vehicles, ground robotics The U.S. Army Contracting Command ñ Warren recently awarded Raytheon the TACOM Strategic Service Solutions indefinite delivery/indefinite quantity contract. The five-year multiple-award vehicle has a ceiling value of $634 million. The agreement covers future work on sensors, fire control systems, active protection systems, and robotics...
 

 

Lockheed Martin’s EW pod delivers proven ability to protect, control electromagnetic spectrum

Lockheed Martin is testing an electronic warfare pod in the company’s advanced anechoic chamber. The pod is designed to fit a variety of platforms, and is a self-contained electronic warfare package, encompassing an entire suite of capabilities in one unit.  Electronic warfare is the art and science of controlling the electromagnetic spectrum—from jamming enemy communications...
 
 
Northrop Grumman photograph

Northrop, Navy successfully conduct E-2D Advanced Hawkeye aerial refueling CDR

Northrop Grumman photograph An E-2C test aircraft assigned to Air Test and Evaluation Squadron (VX) 20 conducts an aerial refueling dry-plug engagement with an F/A-18. Northrop Grumman along with the U.S. Navy have successfully...
 
 

Northrop, Navy celebrate legacy of EA-6B Prowler

Northrop Grumman photograph by Edgar Mills The U.S. Navy’s last operational EA-6B Prowler, designed and built by Northrop Grumman, lifts off from Naval Air Station Whidbey Island, Wash. in a ceremonial fly-away June 27 from its long time operational base. The Navy is retiring the Prowler after nearly 45 years of service.   The U.S....
 




0 Comments


Be the first to comment!


Leave a Reply

Your email address will not be published. Required fields are marked *

You may use these HTML tags and attributes: <a href="" title=""> <abbr title=""> <acronym title=""> <b> <blockquote cite=""> <cite> <code> <del datetime=""> <em> <i> <q cite=""> <s> <strike> <strong>