Business

January 31, 2014

Boeing outlook sinks stock despite solid fourth quarter profit

Joshua Freed
Associated Press

Boeing is building airplanes faster, but Wall Street wants it to build profits faster, too.
Boeing shares dropped more than 5 percent Jan. 29 after it said this year’s profit and revenue would grow less than analysts had been expecting.

There are a number of reasons. Boeing’s defense business is slowing down as governments dial back spending. Some planes slated for delivery in early 2014 were instead delivered late last year – that helped boost Boeing’s fourth-quarter profit, but will take away from this year’s results. And deliveries of its new 787 are a mixed bag, financially. They bring in cash, but hurt profit margins as Boeing accounts for the money it spent developing the plane.

Boeing predicted 2014 revenue of $87.5 billion to $90.5 billion – at least $2 billion less than expected by analysts surveyed by FactSet.

Orders from airlines around the world have pushed both Boeing and Airbus to build more planes than ever before. Some airlines are buying because newer planes are more fuel efficient, and others – especially in Asia and Latin America – are buying planes because more people can afford to fly.

Boeing has sped production of both its workhorse 737, as well as its new 787. It expects to deliver 110 787s this year, up from 65 last year. Last week Boeing began building 787s at a rate of 10 per month. CEO Jim McNerney said that fewer customers than usual are asking to delay deliveries, while requests to accelerate deliveries continue at a steady and quite frankly encouraging rate.

McNerney is 64 and is nearing Boeing’s usual retirement age of 65. Boeing has said the board can ask its CEO to stay longer. I’m not planning to retire anytime soon, McNerney said Wednesday on a conference call.

Boeing finished 2013 with a fourth-quarter profit of $1.23 billion, or $1.61 per share, well ahead of analyst expectations. Profits grew in both its commercial airplane and defense businesses.

Revenue rose 7 percent to $23.79 billion.

For all of 2013, Boeing earned $5.96 per share on revenue of $86.62 billion.

A slowdown in U.S. and European military spending has forced Boeing and other defense contractors to overhaul their defense businesses. Boeing has been somewhat shielded from spending cuts because the new tanker jet it is building for the U.S. Air Force, based on its 767 airliner, has avoided cuts.

Boeing said defense revenue rose 2 percent from 2012 to 2013, but could fall almost 10 percent this year.




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


 
 

 

Headlines July 31, 2015

News: Carter: Military leaders could arm more troops at home – Following the recent fatal shooting of four Marines and a sailor in Tennessee, Defense Secretary Ash Carter is ordering the military services to consider new policies that would enhance security for troops at home, including potentially arming more personnel.   Business: DOD weighs supplier base,...
 
 

News Briefs July 31, 2015

U.S. delivering eight newer F-16 warplanes to Egypt The United States Embassy in Cairo says the U.S. is delivering eight newer F-16 warplanes to Egypt as part of an ongoing military support package. It says in a July 30 statement that the aircraft, of the current Block 52 production variant, will be flown in from...
 
 
Lockheed Martin photograph

Lockheed Martin successfully tests design changes for Orion spacecraft’s fairing separation system

Lockheed Martin photograph A protective panel for Orion’s service module is jettisoned during testing at Lockheed Martin’s Sunnyvale, California facility. This test series evaluated design changes to the spacecraft’s fair...
 

 

Australian company to provide parts for initial production of Triton UAS

Northrop Grumman has awarded the first Australian supplier contract for the U.S. Navy’s MQ-4C Triton unmanned aircraft system initial production lot to Ferra Engineering. Brisbane-based Ferra Engineering will manufacture mechanical sub-assemblies for the first four Triton air vehicles including structural components. “At Northrop Grumman it’s very important to not only develop...
 
 
Boeing photograph

CH-46 ‘Phrog’ makes its last hop

Boeing photograph The CH-46 Sea Knight helicopter commonly known as the “Phrog,” is set to retire and to be flown one last time by Reserve Marine Medium Helicopter Squadron (HMM) 774 on Aug. 1. The CH-46 Sea Knight is a med...
 
 

Insitu awarded LRIP Lot IV RQ-21A Blackjack Systems contract

Under the terms of its latest contract, Insitu will build six RQ-21A Blackjack systems for the U.S. Navy and Marine Corps. The $78-million Small Tactical Unmanned Aircraft Systems Lot IV Low Rate Initial Production contract is the latest event in the program’s progression toward the Initial Operational Test and Evaluation phase.   “This award will...
 




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>