September 25, 2023

Boeing Tops Expectations as It Steps Up Deliveries

Boeing’s problems with its 787 have made headlines, but they aren’t slowing the big plane maker down.

The company’s second-quarter earnings topped expectations as it ramped up deliveries of commercial planes like its 737 and its 777. It also raised its full-year profit guidance.

Boeing resumed delivering 787s in the quarter after deliveries were halted for nearly four months after the planes were grounded for battery problems. Boeing delivered 16 of the technologically advanced jets during the quarter. It still expects to deliver at least 60 of the 787s this year — the same goal it had before the battery problems surfaced.

Boeing is in the midst of a boom in airplane orders as airlines in Asia and Latin America expand. Production of most of its planes is speeding up. It is taking its workhorse 737 to 42 planes per month. When an analyst asked about building 45 per month, Chairman and CEO Jim McNerney said executives are seeing some pressure to move in that direction. He also said there’s pressure to raise the 787 rate above 10 per month.

“If I were a betting man, I’d think the marketplace demand could move us in that direction over time,” he said.

Boeing Co. shares fell 84 cents to $106.95 after earlier hitting a 52-week high of $109.49.

Boeing has incurred expenses from the 787 problems. McNerney said it has finished paying airline customers that had to stop flying their 787s because of the grounding. Boeing didn’t say how much it spent, but it wasn’t enough to show up in the company’s financial results released Wednesday.

Airlines have to keep making payments on planes whether they’re flying or not, and the grounded planes couldn’t carry passengers to bring in revenue. The Polish government has said the grounding cost LOT Polish Airlines more than $30 million in lost flights alone. Several airlines had said they wanted compensation from Boeing.

“There were some instances where we had obligations to customers, and those have all been satisfied,” McNerney said. “We think they are all behind us now,” he added.

He also said Boeing is discussing with Ethiopian Airlines the method for repairing a 787 that caught fire while parked at London’s Heathrow airport on July 12. The fire appeared to burn through the outside skin of the plane’s tail, suggesting that an extensive repair will be needed.

Deliveries of all commercial planes rose 13 percent to 169 planes during the quarter. The 737 and 777 are money-makers and contributed to Boeing’s larger profits during the most recent quarter. The 787 still costs more to build than what Boeing makes on it, but each delivery brings in much of the revenue for the plane’s price tag.

Boeing has booked orders for 83 787s this year. The list price for a 787-8 is $207 million, although discounts are routine.

Boeing’s net income rose 13 percent to $1.09 billion, or $1.41 per share. During the same period last year it earned $967 million, or $1.27 per share. Revenue rose 9 percent to $21.82 billion.

The results include costs from pensions. On that basis, analysts surveyed by FactSet had been expecting a profit of $1.30 per share with revenue of $20.79 billion.

Boeing raised its full-year profit guidance to $6.20 to $6.40 per share — a dime higher than its old guidance. Once it pays for pension expenses it will earn $5.10 to $5.30 per share. On that basis, analysts are expecting $5.34 per share.

The company now expects revenue of $83 billion to $86 billion, which is $1 billion more than it previously predicted. Analysts were expecting $84 billion.

Revenue from commercial planes rose 15 percent to $13.62 billion, and profits in that segment jumped 20 percent to $1.45 billion.

Things are slower at Boeing’s defense arm. Revenue there was flat at about $8.19 billion, although operating profits rose 4 percent to $776 million. Boeing and other defense contractors have had to cope with the automatic federal spending cuts that took effect in the spring.

Article source:

Bucks Blog: Thursday Reading: Flu Is Widespread This Year

January 10

Thursday Reading: Flu Is Widespread This Year

Flu is widespread this year, Boeing says 787 is safe, a survey of mobile chargers and other consumer-focused news from The New York Times.

Article source:

Boeing Posts Higher Profit, but Cuts Delivery Forecast

Boeing now says it will deliver 15 to 20 of its new 787s and 747-8s this year. That’s 10 fewer than Boeing’s previous estimates. It also said that two-thirds of those deliveries will be the 747-8s. It didn’t say why the delivery forecast was cut.

The two jets have been years in the making, and Boeing delivered the first of each of them in recent weeks. The 787 carried its first passengers on Wednesday on a flight by Japan’s All Nippon Airways.

Investors chose to focus on the strong quarterly results. Shares rose nearly 4 percent as Boeing said it earned $1.1 billion for the quarter ended Sept. 30, up 31 percent from its net income of $837 million during the same period last year. The profit of $1.46 per share was far above the $1.10 per share expected by analysts surveyed by FactSet. The company has easily surpassed Wall Street’s profit expectations in each of the first three quarters this year.

Boeing earned $1.12 per share in last year’s third quarter.

Revenue rose 4 percent to $17.73 billion. Analysts had been expecting $17.79 billion.

Boeing raised its full-year guidance to $4.30 to $4.40 per share from $3.90 to $4.10 per share.

Boeing said its initial accounting block for the 787 is 1,100 planes, which is the number it either has sold or expects to sell. It will average out production costs across those 1,100 planes. That avoids a situation where Boeing would have to account for losing money on early, slowly-built planes when it was still learning how to make them efficiently.

Roughly half of Boeing is its commercial airplanes division. The other half is the defense division, which produced much of the third-quarter profit growth. Defense had operating earnings of $824 million, up 20 percent, even though revenue was flat at $8.2 billion.

Boeing Commercial Airplanes saw earnings rise 7 percent to $1.09 billion, with revenue up 9 percent to $9.52 billion.

Boeing shares rose $2.78, or 4.4 percent, to $66.50 in premarket trading.

Article source:

Improved Sales Help Boeing Beat Forecasts

Boeing on Wednesday exceeded profit expectations for the second quarter as a result of more plane sales, a development that helped it raise its 2011 earnings guidance.

The company said it remained on track to deliver its first 787 Dreamliner passenger jet and 747-8 air freighter in the third quarter.

But Boeing, based in Chicago, also narrowed its delivery forecast for the new models. It now expects to deliver a total of 25 to 30 of them this year, compared with its previous expectation of 25 to 40.

Still, that projection was trimmed less than many analysts had anticipated. And the increase in plane deliveries in the second quarter helped drive a rebound in that part of Boeing’s business, which had slipped behind its military work in total revenue and profit.

W. James McNerney Jr., Boeing’s chief executive, told analysts that the company’s decision to install new engines on its single-aisle 737 jets, rather than build a new version of the plane, evolved over the last two to three months.

The decision was unveiled in an unusual fashion last week, when American Airlines announced that it would split a $38 billion plane order between Boeing, its longtime supplier, and Airbus, Boeing’s European rival.

Airbus announced several months ago that it would redesign its A320 models to accommodate more fuel-efficient engines. Boeing executives had said publicly that they were leaning toward building a new plane by 2020.

But Mr. McNerney told the analysts on Wednesday that two things had changed in Boeing’s calculations.

With Airbus quickly picking up orders for the plane with new engines, American and other airlines made it clear to Boeing that they would rather have “greater certainty in the midterm” on fuel savings than wait for “the more perfect solution,” Mr. McNerney said.

He said that Boeing’s studies also showed that it would be riskier than previously expected to set up a production system for an entirely new plane, especially given that production rates have been surging for the single-aisle jets.

Mr. McNerney said that Boeing believed that new engines would yield 10 to 12 percent in fuel savings on the 737s. Boeing officials said the changes could enable the 737 to retain what Boeing claims is an 8 percent advantage in total operating costs over the A320, even after that plane has new engines as well.

Boeing has announced plans to expand 737 production to 42 planes a year by 2014. Mr. McNerney said that the order backlog was so substantial that Boeing was likely to increase that to 50 or 60 planes by the end of the decade.

Boeing reported that its earnings increased 20 percent to $941 million, or $1.25 a share, from $787 million, or $1.06 a share, in the year-ago quarter. Revenue rose 6 percent to $16.5 billion from $15.6 billion. Analysts had expected Boeing to earn 97 cents a share.

The company raised its earnings forecast for all of 2011 to $3.90 to $4.10 a share. Its earlier forecast was $3.80 to $4 a share.

The company’s stock rose 47 cents to $70.63, on a day when the overall market was down sharply.

Article source:

Boeing Beats Expectations and Raises Guidance

Opinion »

The Stone: Winehouse, Breivik and Deadly Ideals

At the root of two tragedies, we find a pathological preoccupation with norms.

Article source:

N.L.R.B. Rules Would Streamline Unionizing

The labor board wants to tighten up the process by ensuring that employers, employees and unions receive needed information sooner and by delaying litigation over many voter-eligibility issues until after workers vote on whether to unionize.

The labor board’s news release and fact sheet did not explain how many days the election process might be shortened as a result of the proposed regulations, on which the public will have 75 days to comment.

Unions have long complained that it takes too many weeks from when they petition for an election to when a secret-ballot election is held. They say the process gives management too much time to mount an aggressive antiunion campaign with videos and one-and-one sessions with workers.

According to the N.L.R.B., the average amount of time it took from petition to election in 2008 was 57 days.

American companies have repeatedly opposed any effort to shorten the period from petition to vote, saying that would make it harder for managers to tell workers about the disadvantages of unionizing and to ensure that workers gets both sides of the story.

The board said its steps announced Tuesday “are intended to reduce unnecessary litigation, streamline pre- and postelection procedures and facilitate the use of electronic communications and document filing.”

N.L.R.B. officials say they are not mandating any specific timetable for an election. Nonetheless, Republicans — many of whom are livid with the labor board for accusing Boeing of acting illegally by opening a plant in South Carolina — are expected to attack the board’s proposed rulemaking, saying it shows yet again that President Obama’s N.L.R.B. is doing favors for organized labor.

The board says such rulemaking is a common part of its 75-year history. “It is fair to predict that the new proposals will be controversial,” the board’s chairwoman, Wilma B. Liebman, said in a statement. “That controversy is unfortunate, but it is not a good reason for the board to abandon its responsibilities.”

The board’s most recent annual report says that 1,619 unionization elections were held in fiscal year 2009, with unions winning 63.8 percent of them. Business groups say that such a high winning percentage refutes labor’s claims that the process is unfair. But union officials assert that if the election process were not so skewed and unfair, that percentage would be far higher and they would be pushing to hold many more elections, perhaps helping to reverse organized labor’s decline.

In an article about the N.L.R.B., Samuel Estreicher, a law professor at New York University, noted that unions considered the time between petition and election a problem “because employee interest in collective representation can wane and dissipate simply by the passage of time.”

In one important specific change, the labor board will seek to avoid election delays by deferring a common form of litigation in which companies argue that some employees should not vote because they should be considered supervisors. Challenges to voter eligibility can often delay elections for several weeks. Under the proposed regulations, such litigation would generally be deferred until after the election.

“One of the most important duties of the N.L.R.B. is conducting secret-ballot elections to determine whether employees want to be represented by a labor union,” Ms. Liebman said. “Resolving representation questions quickly, fairly, and accurately has been an overriding goal of American labor law for more than 75 years.”

In a move that board officials say will make it easier for employees, employers and unions, the labor board proposes to allow petitions and other election documents to be filed electronically. Under federal rules, signatures of at least 30 percent of a workplace’s employees are needed to petition for a unionization election.

Article source:

The Week’s Business News in Pictures.

The 747-8 Intercontinental, Boeing’s largest passenger airplane, after its first flight last Sunday at Boeing Field in Washington State. The 747-8 can carry 467 passengers in a three-class configuration and is designed for long-haul routes. The plane is a longer and more fuel-efficient update of Boeing’s double-decker 747 jumbo jet, and will compete with the Airbus A380, the world’s biggest passenger plane.

Article source: