Boeing bullish about near term
Boeing, the world’s largest aerospace and defence group, reported a sharp rise in first quarter earnings on Friday and issued a robust assessment of short-term prospects.
The Seattle-based company said first quarter net earnings almost tripled to $1.24bn, or $1.45 per share, compared with $418m, or 48 cents per share, in the first three months of 2000. Revenues jumped 34 per cent to $13.3bn from $9.9bn last time.
The quarterly profit was inflated by a one-off tax credit of $475m, while last year’s performance was depressed by a 40-day strike by engineers at Boeing’s commercial aircraft division in February and March, which hit deliveries of jets. Excluding extraordinary items net profits more than doubled to $762m from $359m.
The improved performance of the commercial aircraft division, Boeing’s largest and most profitable business which makes jets ranging from the 717 shorthaul aircraft to the 747 jumbo, was the main earnings driver as deliveries rose to 122 from 75 aircraft over the quarter.
Operating profits of the civil jet business more than tripled to $860m from $259m. A combination of last year’s industrial action, efficiency improvements and better mix in deliveries led to a more than doubling of the margins to 10.2 per cent.
Phil Condit, Boeing’s president and chief executive, said there was no evidence that the economic downturn was hurting business. “The overall market appears to be pretty solid. We have not had any airlines talking about moving [their order] positions.”
Mike Sears, Boeing’s chief financial officer, said all indications were that the economy was heading for a soft landing and there was no need to change the current forecasts for annual production rates of 530 commercial jets this year and next.
Mr Condit said he expected to form a formal working group with a number of leading airlines to develop a detailed specification for its revolutionary sonic cruiser.
At the end of March, Boeing announced it was bowing out of the race to with rival Airbus to sell a competing superjumbo product and would instead focus on developing a longer-range aircraft capable of flying just under the speed of sound.
The sonic cruiser is likely to carry between 175 and 250 passengers and fly 15-20 per cent faster than existing jets, effectively cutting flight times by an hour for every 3,000 miles.
