Business

October 23, 2013

Accelerating deliveries drive Boeing third quarter profits

Joshua Freed
Associated Press

Faster airplane production is going straight to Boeing’s bottom line.

Third-quarter net income rose 12 percent as the company delivered planes to customers at a quicker pace. It has already sped up the assembly of two of its planes ó the 737 and 777 ó and Oct. 23 announced plans to boost production of its new 787 Dreamliner, too.

Boeing raised its profit guidance for the full year. Shares rose $5.29, or 4.3 percent, to $127.77 in afternoon trading.

Profits from commercial planes rose 40 percent, offsetting a 19 percent profit drop in Boeing’s defense division because of a sharp decline in deliveries of military planes.

Boeing earned $1.16 billion, or $1.51 per share, for the quarter. That was up from about $1 billion, or $1.35 per share, a year earlier.

Not counting fluctuations in pension expenses, Boeing would have earned $1.80 per share. Analysts surveyed by FactSet had been expecting $1.55 per share.

Revenue rose 11 percent to $22.13 billion, also topping analyst expectations.

Boeing now expects adjusted earnings for the year of $6.50 to $6.65 per share. Analysts had been expecting $6.52. Revenue is projected at $83 billion to $86 billion. Analysts are currently forecasting $84.9 billion.

Boeing expects to deliver 635 to 645 passenger airplanes this year, including at least 60 787s.

The 787 was first delivered in 2011. It’s a long-range, fuel-efficient plane that has turned out to be very popular with airlines. It has sold 131 of the planes this year, even after battery problems grounded them for a while. Deliveries resumed in May.

Boeing is still working to fix the reliability of the 787. CEO Jim McNerney said on a conference call that its “dispatch reliability” ó meaning the plane’s readiness for a flight ó is at 97 percent, but needs to be better. “We’re not pleased yet,” he said.

Boeing is boosting production to get through its backlog of 890 of the 787s that have been ordered but not delivered. By year end, it expects to be building 10 787s every month. On Wednesday, Boeing said it plans to go up to 12 per month in 2016, and it’s aiming to get to 14 per month by the end of this decade.




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