Boeing posts $607 million profit, raises outlook
Wednesday, July 28th 2004, 11:03 am
By: News On 6
CHICAGO (AP) _ Boeing Co. reported a better-than-expected $607 million profit for the second quarter and raised its earnings estimates for the rest of this year and next, buoyed in part by an improving outlook for the long-stagnant commercial airplane business.
The nation's largest aerospace company, continuing to ride out the commercial aviation slump thanks to a thriving defense business, said it expects to deliver more jets than previously forecast in 2005 as a result of the slow recovery in the commercial airplane market.
Net income for the April-through-June period amounted to 75 cents a share, compared with a loss of $192 million, or 24 cents a share, for the same period a year earlier when results were dominated by a $1.1 billion charge reflecting the problems in its satellite and launch businesses.
Excluding one-time items, including 23 cents a share for a hefty federal tax refund, operating earnings were 50 cents a share. Analysts surveyed by Thomson First Call had predicted earnings of 47 cents a share.
Revenue rose 3 percent to $13.1 billion from $12.7 billion. The defense business provided 55 percent of that total, rising 9 percent to $7.2 billion.
The commercial airplanes unit saw revenues slip 3 percent to $5.67 billion, with the company citing a higher proportion of less expensive 737 planes among its deliveries. But operating profits from the Seattle-based unit jumped 22 percent as lower costs more than offset the revenue drop and higher development expenditures for the new 7E7 airplane program.
The 7E7, the mid-sized jet that Boeing intends to start flying in 2008, gave the commercial division a significant lift with its formal launch in April with four airline customers and 62 airplanes ordered. The company said customer interest in the fuel-efficient plane remains ``very strong'' with airlines' proposals for over 200 7E7s.
Boeing boosted its estimate for 2004 earnings by 20 cents a share to a range of $2.25 to $2.45, and raised the 2005 outlook by 15 cents a share to a range of $2.35 to $2.60. It was the second straight quarter under new CEO Harry Stonecipher that the guidance was increased.
It raised its forecast for 2005 deliveries to 315 to 320 airplanes, up from about 285 this year. The company's previous estimate for next year was 300.
``Boeing delivered strong results in the second quarter as we continued to execute well in our core businesses and invest for growth,'' Stonecipher said.
Analyst Paul Nisbet of JSA Research said Boeing has endured the commercial aviation slump thanks mostly to a slew of orders from discount airlines that are buying planes in order to expand.
``If they come anywhere near close to getting the 200 orders this year for the 7E7, I think everyone would agree that they've ridden it out and done well,'' he said.
For the first six months, Boeing earned $1.23 billion, or $1.52 a share, compared with a loss of $670 million, or 84 cents a share, in the first half of 2003. Revenues were $26.0 billion, a 4 percent increase over $24.9 billion a year earlier.