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 April 1, 2015

News: Iranian aircraft buzzed U.S. Navy helo in Persian Gulf - An Iranian aircraft buzzed a Navy helicopter operating in the Persian Gulf earlier this month, a U.S. military official said March 31. Active duty suicides up in 2014 - Suicides among active duty members of the military increased in 2014, though reservists and members of the...
 
 

News Briefs April 1, 2015

Germany, France, Italy plan to develop military drones Germany and France plan to work together with Italy to develop military surveillance drones that could also carry weapons. French President Francois Hollande said after meeting German Chancellor Angela Merkel March 31 that it is important for Europe to be independent in both manufacturing drones and in...
 
 
Northrop Grumman photograph

AirRobot, Northrop Grumman Remotec sign distribution agreement for unmanned aerial systems

Northrop Grumman photograph An AirRobot unmanned aerial system flies at Fort Benning, Ga.. Northrop Grumman Remotec is the sole reseller of the systems to law enforcement and first responders under a distribution agreement sign...
 

 

Raytheon awarded $528 million AMRAAM contract

Raytheon has been awarded a $528,797,459 fixed-price incentive, firm target contract modification for Advanced Medium Range Air-to-Air Missiles. Raytheon will provide AMRAAM Lot 29 missiles and other AMRAAM system items. This contract involves foreign military sales. Work will be performed in Tucson and is expected to be complete by January 2018. This award was booked...
 
 

Raytheon, DRS team for Army’s third Generation IFLIR B-Kit

Building on their combined platform integration experience, Raytheon and DRS Technologies have entered into a teaming agreement for the U.S. Army’s 3rd Generation Improved Forward Looking Infrared program B-Kit “Raytheon and DRS have teamed to provide an IFLIR solution that provides our military supremacy in reconnaissance, surveillance and target acquisition,” said Dr. Taylor...
 
 

U.S. Air Force awards Raytheon $91.5 million for MALD-J

Raytheon Company received a $91.5 million U.S. Air Force contract modification award for the Miniature Air Launched Decoy Jammer missile. The contract modification is for Lot 8. Work will be performed in Tucson and is expected to be complete by June 2017. This award was booked in the first quarter 2015. MALDÆ is a state-of-the-art,...
 




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>