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.


 
 

 
Air Force photograph by Rick Goodfriend

B61 undergoes testing in AEDC wind tunnel

Air Force photograph by Rick Goodfriend Arnold Engineering Development Complex engineers recently joined researchers with Sandia National Laboratories to perform a wind tunnel test on a full-scale mock-up B61. Pictured with the...
 
 

Ingalls Shipbuilding awarded $23.5 million LHA 8 affordability contract

Huntington Ingalls Industries’ Ingalls Shipbuilding division has been awarded an affordability design contract for $23.5 million for early industry involvement to reduce the construction and life-cycle cost for the amphibious assault ship LHA 8. “Ingalls Shipbuilding has been constructing large-deck amphibious ships for nearly 50 years, and this contract will build on our company...
 
 

Lockheed Martin on team to provide ISS mission planning support

As part of an SGT, Inc.-led team, Lockheed Martin will provide mission and flight crew operations support to NASA for the International Space Station and future human space exploration. These support services within the Integrated Mission Operations Contract II are critical to the safe operation of all NASA human spaceflight missions. Under IMOC II, Lockheed...
 

 
boeing-israel

Boeing, Jordache’s MG Aviation finalize order for two 787-9 Dreamliners

Boeing and MG Aviation Limited July 16 finalized an order for two additional 787-9 Dreamliners, valued at $499 million at current list prices. The order will support the leasing company’s growing fleet of modern airplanes...
 
 

ASL Aviation Group to procure LM-100J freighters

ASL Aviation Group signed a Letter of Intent with Lockheed Martin to order up to 10 LM-100J commercial freighters during a ceremony in Farnborough, England, July 16. The LM-100J is the civil-certified version of Lockheed Martin’s proven C-130J Super Hercules and is an updated version of the L-100 (or L-382) cargo aircraft. Safair — an...
 
 

ATK, Alenia Aermacchi complete testing on Italian Air Force C-27J

ATK has announced that the ATK and Finmeccanica-Alenia Aermacchi have successfully completed the first phase of ground and flight testing of the fully configured multi-mission MC-27J tactical transport aircraft with the support of the Italian Air Force. The series of tests exceeded all test objectives and demonstrated the accuracy of ATK’s side-mounted GAU-23 30mm cannon....
 




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>