Boeing swings to a $1.27-billion profit despite downturn in aviation
Boeing Co. swung to a fourth-quarter profit compared with a loss last year, when a machinists’ strike halted production lines.
The aerospace company Wednesday reported earnings of $1.27 billion, or $1.75 a share. Boeing lost $86 million, or 12 cents, in the same quarter last year.
Revenue rose to $17.9 billion from $12.7 billion a year earlier.
Boeing posted a profit despite facing an economic downturn that shrank orders for airplanes. Amid the depressed economic environment, airlines were stung by a slump in air travel, and few ordered new planes. Boeing’s military unit also felt the crunch as the Pentagon pulled back on spending.
“Air traffic was horrible last year, and aircraft orders were anemic. Still, Boeing beat expectations,” said Alex P. Hamilton, an analyst at Jesup & Lamont in New York. “Overall, it was a solid report.”
Boeing shares jumped $4.22, or 7.3%, to $61.93.
Looking forward, the Chicago company is hoping for a boost from the 787 Dreamliner, which has been delayed more than two years, and the 747-8 jet, a larger variant of its popular 747 jumbo jet.
Both programs have incurred several developmental setbacks, which have cost Boeing billions of dollars. The planes are scheduled for delivery at the end of this year.
Jim McNerney, Boeing’s chairman and chief executive, said he anticipated “head count reductions” in the face of a tough business environment.
“The global recession has clearly affected our airline customers,” McNerney said. “It will take some time for economic indicators to rebound significantly.”
Boeing projected that it would earn $3.70 to $4 a share in 2010. Analysts were expecting the company to earn $4.26 a share.
The company also said it expected revenue to be around $65 billion this year, compared with $68.3 billion in 2009.
Boeing cited fewer 777 jetliner deliveries and Pentagon cutbacks for the drop-off in revenue.
Peter Arment, an analyst with Broadpoint AmTech in Greenwich, Conn., predicts that Boeing’s military business will drop about 3% in 2010.
“Certainly, there will be winners and losers,” he said. “But all prime defense contractors can expect that the defense budget will be flat, at best, going forward.”
Boeing is one of the largest private employers in Southern California, with a factory that produces the C-17 cargo plane in Long Beach and a satellite operation in El Segundo.
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