Boeing’s Earnings Positive on increased Revenues
The aerospace company Wednesday reported a net profit that topped expectations on a 42 percent revenue increase even as it grappled with a decline in orders, sending shares higher in premarket trading.
Chicago-based Boeing, the world’s second-largest plane maker, boasted that it ended a difficult year on a high note with the first flight of its long-delayed 787 Dreamliner.
The company reiterated that it plans to deliver the first 787 in the fourth quarter of 2010.
Boeing and its top rival Airbus were dogged in 2009 by fewer orders for airplanes as carriers around the world grappled with falling travel demand in the sagging economy.
Meanwhile, Boeing’s defense unit struggled with sweeping government budget cuts.
“There’s definitely some challenges. But I think coming off a year where you had almost a perfect storm, they performed very well,” said Alex Hamilton, an analyst at Jesup & Lamont.
Boeing’s [BA 57.71 — UNCH (0) ] shares gained more than 2 percent to $59.30. They initially fell after the report.
Hamilton blamed the company’s 2010 earnings outlook, which was well below Wall Street forecasts.
The company forecast a profit of $3.70 to $4 per share in 2010, which reflects the 777 production rate reduction and reduced scope on Army modernization and missile defense programs.
Wall Street analysts expected the company to earn $4.26 per share in 2010 on revenue of $65.42 billion.
Hamilton said he was looking for any signs that the company will cut production of its hot-selling 737 plane.
Boeing Chief Executive Jim McNerney said in a statement that the company generated “solid core operating performance” in 2009.
“Focus areas for 2010 are to continue our strong operational performance, certify and deliver the 787 and 747-8, and further reposition our defense, space and security business,” McNerney said.
Boeing reported a quarterly net profit of $1.27 billion, or $1.75 per share, compared with a year-earlier loss of $86 million, or 12 cents per share. The year-ago loss was partly caused by a 2008 labor strike.
Excluding one-time items, Boeing reported a quarterly profit of $1.77 per share, compared with a Wall Street consensus estimate of $1.36 per share, according to Thomson Reuters I/B/E/S. Revenue rose 42 percent to $17.9 billion.
Boeing Commercial Airplane reported earnings of $1 billion, compared with a loss of $968 million a year ago. Revenue in the most recent quarter rose to $9.2 billion, up from $4.6 billion.
Boeing said this month that orders fell 61 percent to 263 commercial airplanes in 2009, amid a steep decline in air travel and freight transport.
Plane deliveries, which immediately affect the company’s financial performance, totaled 481 in 2009, up 28 percent from 375 in 2008. Deliveries were in line with the company’s forecast for 480 to 485.
Boeing Defense, Space & Security reported earnings of $829 million, compared with $881 million a year earlier, and revenue of $8.5 billion compared with $8 billion a year ago.