The Boeing Co. on Wednesday delivered a big surprise to Wall Street this morning: earnings more than 80 percent above analysts’ average predictions.
Earnings for the fourth quarter totaled $1.84 a share. Wall Street had predicted a $1 per share profit. Other fourth-quarter numbers were up significantly. Revenues at $19.55 billion rose 18 percent from the fourth quarter of 2010. Earnings from operations, $1.597 billion, increased by 45 percent from the prior year. And net income bumped up 20 percent to $1.393 billion from the same quarter in 2010. Boeing’s Puget Sound-based Commercial Airplanes Group saw significantly better results both in the fourth quarter and for the full year.
Airliner deliveries increased from 116 in 2010 to 128 last year in the fourth quarter. Revenues for the division in the fourth quarter, driven by the long-awaited start of deliveries for the delayed 787 and 747-8 aircraft, rose by 31 percent. Earnings from operations in the fourth quarter were positive by 56 percent. For the full year, deliveries were up by 15 aircraft to 477, and earnings from operations were higher by 16 percent at $3.495 billion.
The company’s other major division, Defense, Space and Security, outperformed analyst estimates with a 4 percent increase in revenue and a 6 percent increase in earnings from operations to $865 million in the fourth quarter.
A stronger order book, an increased pace of deliveries for Boeing’s newest planes, the 787 and the 747-8, a new contract for Air Force tankers and Saudi fighter aircraft are giving the company “renewed momentum” for 2012, said Boeing chairman James McNerney.
“With a record backlog and intense focus on productivity, we are well positioned to deliver growth and increased competitiveness even as we face constrained U.S. defense spending and pension headwinds,” McNerney said in a prepared statement.
For the full year 2011, the company’s results reflected a similar upside as did the fourth quarter numbers: Net income rose 21 percent to $4.02 billion; earnings per share were up 20 percent to $5.34 a share; operating cash flow increased 36 percent to $4.02 billion, and the company’s operating margin increased from 7.7 percent to 8.5 percent last year.
The company forecast much stronger revenues, particularly in the Commercial Airplanes Group, but weaker earning in 2012.
Revenues are expected to rise to $78 billion to $80 billion, compared with $68.7 billion in 2011. That revenue jump will be driven in large measure by a big increase in commercial airplane deliveries this year as Boeing increases production rates and unravels knots in its 787 and 747-8 production and delivery systems.
Commercial aircraft deliveries are expected to be in the range of 585 to 600 airliners, the highest level since 1999.
Revenues for the commercial aircraft operation are expected to rise to $47.5 to $49.5 billion, compared with $36.2 billion in 2011.
But Boeing said it expects its earnings per share will be down for 2012 in the range of $4.05 to $4.25 a share compared with last year’s $5.34.
A large pension contribution, $2.6 billion or $2.21 a share, is expected to depress those earnings. The company contributed 83 cents a share to its pension funding in 2011.
John Gillie: 253-597-8663 john.gillie@thenewstribune.com
JOIN THE DISCUSSION | Register here
We welcome comments. Please keep them civil, short and to the point. ALL CAPS, spam, obscene, profane, abusive and off topic comments will be deleted. Repeat offenders will be blocked. Thanks for taking part — and abiding by these simple rules. A thorough explanation of rules of conduct can be found in our Terms of Service. If you have any questions, including why your comment may not be showing immediately after you submit it, be sure to visit the commenting FAQ.