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 January 23, 2015

News: Two Marines identified in deadly California helo crash - Two Marine Corps officers killed when their helicopter crashed during a training exercise in the Southern California desert were remembered Jan. 25 as talented pilots. Greek F-16 crashes in Spain during NATO exercise - Ten people died Jan. 26 after a Greek air force F-16 jet crashed...
 
 

News Briefs January 26, 2015

Navy wants to increase use of sonar-emitting buoys The U.S. Navy is seeking permits to expand sonar and other training exercises off the Pacific Coast, a proposal raising concerns from animal advocates who say that more sonar-emitting buoys would harm whales. The Navy now wants to deploy up to 720 sonobuoys about 12 miles off...
 
 
Air National Guard photograph by SSgt. Annie Edwards

ANG conducts air refueling training with NATO allies in Germany

Air National Guard photograph by SSgt. Annie Edwards A NATO E-3A AWACS aircraft approaches a Utah Air National Guard KC-135R Stratotanker for air refueling during a training flight over Germany on Jan. 13, 2015. Nearly 30 airme...
 

 
Air Force photograph by SrA. Armando A. Schwier-Morales

Ramstein Airmen train with French air force

Air Force photograph by SrA. Armando A. Schwier-Morales Two U.S. Air Force pilots and a French air force navigator discuss the route to the drop zone during a simulated low-level drop Jan. 21, 2015, at Orleans – Bricy Air...
 
 

Marines receive first F-35C Lightning II carrier variant

The first F-35C Lightning II, carrier variant, for the U.S. Marine Corps touched-down on the flight line at Eglin Air Force Base, Fla., Jan. 13, from the Lockheed Martin plant in Fort Worth, Texas, to begin training in support of carrier-based operations. U.S. Marine Lt. Col. J.T. Ryan, Marine Fighter Attack Squadron 501 detachment commander...
 
 

VA announces single regional framework under MyVA initiative

The Department of Veterans Affairs announced Jan. 26 that it is taking the first steps under the MyVA initiative to realign its many organizational maps into one map with five regions to better serve Veterans. The new regions under the MyVA alignment will allow VA to begin the process of integrating disparate organizational boundaries into...
 




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>