Boeing’s Profit Soars 79% in Third Quarter

Boeing Co. said its profit climbed 79% in its third quarter, beating forecasts, as it delivered more jetliners with fewer employees in its commercial-aircraft business.

Profit from operations rose to $518 million, or 56 cents a share, from $290 million, or 30 cents, in the year-earlier period, as sales increased 4.4% to $13.3 billion.

The average analyst estimate published by First Call Corp. was 49 cents. The news prompted investors to bid Boeing’s stock up $3.13 to close at $43.63 on the New York Stock Exchange.

The Seattle-based company, led by Chairman Philip Condit, is rebounding from production problems that depressed profit over much of the last two years. Jet deliveries rose 15% in the quarter to 142 even though Boeing has 32,000 fewer employees than a year ago. The jetliner division earned $501 million after a $142-million loss in the 1998 third quarter, as revenue increased 9% to $8.5 billion.

Condit said Thursday that the firm was able to make significant cost improvements on two new aircraft, the next-generation 737 and the wide-body 777. Improved world economic conditions also will allow sustained production of one of Boeing’s more profitable planes, the jumbo 747-400.

“We are realizing significant performance improvement in production and are confident in our ability to deliver about 620 commercial airplanes this year,” Condit said. “Due in part to the improved Asian economy, we are able to maintain 747 production rate at two per month through 2000.”

Analysts were impressed. “Boeing had excellent performance, and they are continuously moving up,” said Paul Nisbet, aerospace analyst with JSA Research Inc. in Newport, R.I. “You can’t ask for an awful lot more.”

Boeing has warned that jet deliveries will drop to 480 next year from a record 620 in 1999 because of weak conditions in Asia. Condit said the company now expects commercial-jet deliveries in 2001 to be “about the same” as in 2000; a steep decline had earlier been feared.

Boeing also raised profit targets because of productivity gains in the commercial-aircraft business. It predicted operating margins of 5.5% to 6% for 1999, up from the 5% to 5.5% forecast earlier. Margins next year are expected to be 5.5% to 6.5%, up from 5% to 6%.

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Associated Press and Bloomberg News contributed to this report.