Boeing posts record results; Wall Street disappointed

Staff writerJanuary 29, 2014 

Boeing's Renton assembly line will raise its production pace from the present 38 to 42 monthly by mid-summer


Boeing Co.  touted  2013 fourth quarter earnings 29 percent above a year earlier, record commercial aircraft deliveries for the year, a new 10-year money-saving agreement with its largest union and an eight-year airliner production backlog Wednesday, but Wall Street analysts were unimpressed.

The company's stock fell $7.31 a share to $129.78, a 5.33 percent decline in trading Wednesday on the New York Stock Exchange.

Analysts, who had given Boeing high ratings on the prospect of higher commercial deliveries and profits, were disappointed with the company's prediction for 2014 profits of up to $7.20 a share.

The fourth quarter earnings and sales, $1.86 a share and $23.8 billion, beat consensus Wall Street predictions of $1.57 a share and $22.3 billion, but it was the company's projection for the full year financial results that analysts found disappointing.

The company projected its earning would be as much as 13 cents a share higher in 2014 than they were in 2013.

While the company's commercial operations are riding a wave of new orders and increased production, the company's defense division is cautious about the effect of defense belt tightening and budget reductions.

But some analysts said they're hoping that Boeing was simply erring on the conservative side making its predictions for this year.  Last year, for instance, the company had predicted profits for the full year of $6.10 to $6.30 a share but delivered $7.07 a share when all the numbers were totaled.

Analysts expect that new production volume as well as improved profitability per plane could raise the company's 2014 earnings above its projections.

Boeing is working rapidly to dial up the production pace at its commercial airplane factories, most of which are in the Puget Sound area.  The company predicted Wednesday that those deliveries would be between 715 and 725 aircraft this year compared with 648 in 2013.

Boeing's production last year won it the title of the world's biggest commercial planemaker beating Europe's Airbus.  And the company plans further increases. 

Boeing's Renton plant will move from its present 38 per month production pace for the 737 single-aisle jet to 42 this summer.  It plans to raise that assembly line speed eventually to 47 a month.

Boeing just rolled out its first 787 Dreamliner at a production pace of 10 a month. Within two years, Boeing hopes to be building 14 Dreamliners monthly.

Boeing Chairman Jim McNerney told analysts he's encouraged at the pace of orders for the company's new 777X now scheduled to enter commercial service in 2020.  Analysts, however, were concerned that with the new plane on the horizon, orders for the existing 777 will dry up creating a gap between the beginning of production of the updated plane and the fulfillment of orders for the existing 777.

McNerney said he expects orders for the present 777 will be sufficient to bridge the transition between the two aircraft.



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