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.


 
 

 

Headlines April 17, 2015

News: Army extends benefits to Hood shooting victims - The Army will provide “all possible benefits” to victims of the 2009 Fort Hood shooting who recently were awarded the Purple Heart, the service announced April 16.   Business: Rolls-Royce lands biggest deal in its 109-year history - U.K. engineering company Rolls-Royce has won the largest order in...
 
 

News Briefs April 17, 2015

Army orders financial benefits for 2009 Fort Hood victims Dozens of soldiers and surviving family members of the 2009 Fort Hood, Texas, shooting are receiving additional Army pay that they felt was long overdue. The announcement from Army Sec. John McHugh April 16 comes a week after 36 Purple Hearts were awarded to victims and...
 
 
NASA illustration

NASA awards radiation challenge winners, launches next round

NASA illustration This illustration depicts our heliosphere, showing the approximate locations of Voyager 1 and Voyager 2 spacecraft. Galactic cosmic rays originate outside the heliosphere and stream in uniformly from all direc...
 

 

U.S. Air Force completes operational testing on Raytheon’s MALD-J

Raytheon and the U.S. Air Force successfully completed operational tests of Miniature Air Launched Decoy-Jammer, satisfying all requirements to attain Initial Operational Capability. “MALD-J’s unique capabilities have been proven in 42 successful flight tests during the last two years and brought us closer to full rate production,” said Mike Jarrett, vice president of Raytheon...
 
 

Northrop Grumman to expand North Dakota presence

In partnership with local leadership, Northrop Grumman confirmed its dedication to the future of unmanned systems development in the Red River Valley region by signing a lease agreement to anchor the new Grand Sky Technology Park in Grand Forks County. Northrop Grumman is working to identify specialized opportunities for the Grand Sky facility. The opportunities,...
 
 

Raytheon awarded more than $2 billion for an International Patriot system

Raytheon announced April 17 it has been awarded a contract worth over $2.0 billion to deliver the combat-proven Patriot Air and Missile Defense System to an undisclosed international customer. The contract, awarded April 2, 2015, and booked in the second quarter as a direct commercial sale, includes fully digitized new-production Patriot fire units with 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=""> <strike> <strong>