Despite Economic Woes, 787 Delays... Boeing Continues To Make
Money
Even as most of its
domestic airline customers continue to bleed red ink, on Wednesday
Boeing posted a 43-percent increase to its first quarter earnings
for 2008. Net income rose 38 percent to $1.2 billion, according to
the American planemaker, and operating margin rose to 11.3
percent.
Boeing attributed its performance to "solid overall execution in
both its commercial airplane and defense businesses as well as
lower unallocated costs."
"We’re off to a good start in what we expect to be another
strong year of financial performance for Boeing," said Chairman,
President and Chief Executive Officer Jim McNerney. "We are
methodically working through our challenges, including the start-up
of the 787, and our people remain focused on satisfying our
customers and leveraging growth and productivity into better
bottom-line and top-line performance for our company."
Boeing’s quarterly revenue rose 4 percent to $16.0 billion
while its operating cash flow more than doubled to $1.9 billion
reflecting the strong operating earnings and higher commercial
airplane orders -- enough for Boeing to reaffirm its earlier 2008
earnings per share predictions of between $5.70 and $5.85. For
2009, the company expects EPS returns from between $6.80 and
$7.00.
On the airline side, Boeing Commercial Airplanes (BCA)
first-quarter revenues rose to $8.2 billion on an 8 percent
increase in airplane deliveries and higher services volume,
partially offset by lower aircraft trading volume (Table 4).
Operating earnings grew 39 percent to $983 million while margins
expanded to 12.0 percent, driven by higher delivery volume and
services sales and lower R&D spending. During the quarter, the
company delivered its 1,400th 747 airplane and its 700th 777
airplane.
BCA booked 289 gross orders during the quarter, with contractual
backlog rising to a record $271 billion, increasing to more than
seven times BCA’s expected 2008 revenues. The company expects
to deliver between 475 and 480 aircraft in 2008, with those numbers
rising to as many as 505 in 2009.
Despite reports of further delays to its troubled 787 Dreamliner
program, Boeing also reaffirmed progress on the composite-bodied
airliner continues on the revised schedule announced earlier this
month. Boeing says it continues to address slower-than-expected
completion of work that traveled from supplier facilities into
Boeing’s final assembly line and unanticipated rework.
As ANN reported, the company
expects the first flight to occur in the fourth quarter of 2008
with first deliveries to begin in the third quarter of 2009.
Despite the problems, the 787 is not lacking for orders -- with
Boeing recording another 75 Dreamliner orders in the first quarter,
bringing total firm orders to date to 892.
Over on the defense side, Boeing Integrated Defense Systems
(IDS) expanded operating margins by 120 basis points to 11.4
percent on revenues of $7.6 billion.
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