Business

July 24, 2013

Boeing second quarter profit tops expectations despite 787

Joshua Freed
Associated Press

Boeing’s problems with its 787 have made headlines, but they haven’t hurt profits.

It posted a bigger-than-expected second-quarter profit as it ramped up deliveries of commercial planes like its 737 and its 777.

Boeing is in the midst of a boom in airplane orders as airlines in Asia and Latin America expand. It is speeding up production of its 737 as well as the new 787, known as the Dreamliner. Deliveries of all commercial planes rose 13 percent to 169 planes during the quarter.

Deliveries of the 787 were temporarily halted in January when the plane was grounded because of battery problems. But they resumed in May and Boeing delivered 16 of the jets during the quarter. It still expects to deliver at least 60 of the 787s this year ó the same goal it had before the battery problems surfaced.

Boeing’s net income rose 13 percent to $1.09 billion, or $1.41 per share. During the same period last year it earned $967 million, or $1.27 per share. Revenue rose 9 percent to $21.82 billion.

The results include costs from pensions. On that basis, analysts surveyed by FactSet had been expecting a profit of $1.30 per share with revenue of $20.79 billion.

Boeing said that it has finished paying airline customers who had to stop flying their 787s because of the grounding. Boeing didn’t say how much it spent, but it wasn’t enough to show up in the company’s financial results released July 24.

Fifty 787s were grounded for almost four months because of problems with their batteries. Several airlines said they wanted compensation. Airlines have to keep making payments on planes whether they’re flying or not. The Polish government has said the grounding cost LOT Polish Airlines more than $30 million in lost flights alone.

“There were some instances where we had obligations to customers, and those have all been satisfied,” Chairman and CEO Jim McNerney said on a conference call. “We think they are all behind us now,” he added.

He also said Boeing is discussing with Ethiopian Airlines the method for repairing a 787 that caught fire while parked at London’s Heathrow airport on July 12. The fire appeared to burn through the outside skin of the plane’s tail, suggesting that an extensive repair will be needed.

Boeing raised its full-year profit guidance to $6.20 to $6.40 per share ó a dime higher than its old guidance. Once it pays for pension expenses it will earn $5.10 to $5.30 per share. On that basis, analysts are expecting $5.34 per share.

The company now expects revenue of $83 billion to $86 billion, which is $1 billion more than it previously predicted. Analysts were expecting $84 billion.

Revenue from commercial planes rose 15 percent to $13.62 billion, and profits in that segment jumped 20 percent to $1.45 billion. The 787s actually hurt profit margins because they cost more to build than Boeing is collecting, but delivering the planes brings in more revenue.

Things are slower at Boeing’s defense arm. Revenue there was flat at about $8.19 billion, although operating profits rose 4 percent to $776 million. Boeing and other defense contractors have had to cope with the automatic federal spending cuts that took effect in the spring.




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


 
 

 
Virgin Galactic photograph

NTSB concludes SpaceShipTwo flight test accident investigation

Virgin Galactic photograph WhiteKnightTwo and the first SpaceShipTwo during a captive carry test flight over the Mojave Desert. MOJAVE, Calif.–The National Transportation Safety Board has concluded the investigation of th...
 
 

Lockheed Martin, StemRad studying first-responder radiation shield for potential deep-space application

StemRad, Ltd. and Lockheed Martin have initiated a joint research and development effort to determine if StemRad’s radiation shielding technology ñ originally designed for first-responders ñ could help to keep astronauts safe on deep-space exploration missions. This collaboration is part of Lockheed Martin’s ongoing effort to establish international partnerships for human explorat...
 
 

General Dynamics to continue modernizing submarine tactical weapons systems

General Dynamics has received a $20 million contract modification from the U.S. Navy to continue modernizing the AN/BYG-1 Weapons Control System Technology Insertion and Advanced Processing Build software for U. S. Navy and Royal Australian Navy submarines. The AN/BYG-1 software analyzes and tracks submarine and surface-ship contact information, providing tactical, situational awareness for sub...
 

 

Boeing, Vietnam Airlines sign exclusive pilot training agreement

Boeing and Vietnam Airlines announced a five-year exclusive pilot-training agreement to support the Hanoi-based airline’s 787 Dreamliners. Under the agreement, Boeing Flight Services, a business unit of Boeing Commercial Aviation Services, will provide flight training for the airline’s new 787 Dreamliner fleet at Boeing’s Singapore training campus. Nearly 90 Vietnam Airlines p...
 
 
boeing-launch

Boeing WGS-7 satellite to provide military with 17 percent more bandwidth

Boeing’s seventh Wideband Global SATCOM satellite is now in orbit and will soon provide the U.S. and allied militaries with 17 percent more secure communications bandwidth than its predecessors thanks to a payload upgrade. ...
 
 

Boeing, Japanese partners formally sign agreement on 777X

Boeing and key Japanese partners July 23 signed a formal agreement for significant work on Boeing’s new 777X airplane. The agreement finalizes last year’s announcement by Boeing, Japan Aircraft Industries and Japan Aircraft Development Corporation of a Memorandum of Agreement to provide approximately 21 percent of the major airplane structure components for the 777X. The...
 




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>