Sunday, September 21st16.2°C
23284
20950

Boeing 4Q profit rises on strong demand for planes; stock falls on disappointing 2014 outlook

Boeing is building airplanes faster, but Wall Street wants it to build profits faster, too.

Boeing Co. shares dropped more than 5 per cent on Wednesday after it said this year's profit and revenue would grow less than analysts had been expecting.

There are a number of reasons. Boeing's defence business is slowing down as governments dial back spending. Some planes slated for delivery in early 2014 were instead delivered late last year — that helped boost Boeing's fourth-quarter profit, but will take away from this year's results. And deliveries of its new 787 are a mixed bag, financially. They bring in cash, but hurt profit margins as Boeing accounts for the money it spent developing the plane.

Boeing predicted 2014 revenue of $87.5 billion to $90.5 billion — at least $2 billion less than expected by analysts surveyed by FactSet.

Orders from airlines around the world have pushed both Boeing and Airbus to build more planes than ever before. Some airlines are buying because newer planes are more fuel efficient, and others — especially in Asia and Latin America — are buying planes because more people can afford to fly.

Boeing has sped production of both its workhorse 737, as well as its new 787. It expects to deliver 110 787s this year, up from 65 last year. Last week Boeing began building 787s at a rate of 10 per month. CEO Jim McNerney said that fewer customers than usual are asking to delay deliveries, "while requests to accelerate deliveries continue at a steady and quite frankly encouraging rate."

McNerney is 64 and is nearing Boeing's usual retirement age of 65. Boeing has said the board can ask its CEO to stay longer. "I'm not planning to retire anytime soon," McNerney said Wednesday on a conference call.

Boeing finished 2013 with a fourth-quarter profit of $1.23 billion, or $1.61 per share, well ahead of analyst expectations. Profits grew in both its commercial airplane and defence businesses.

Revenue rose 7 per cent to $23.79 billion.

For all of 2013, Boeing earned $5.96 per share on revenue of $86.62 billion.

A slowdown in U.S. and European military spending has forced Boeing and other defence contractors to overhaul their defence businesses. Boeing has been somewhat shielded from spending cuts because the new tanker jet it is building for the U.S. Air Force, based on its 767 airliner, has avoided cuts.

Boeing said defence revenue rose 2 per cent from 2012 to 2013, but could fall almost 10 per cent this year.

In afternoon trading, Boeing Co. shares fell $7.59, or 5.5 per cent, $129.50. They have backed away from a 52-week high of $144.57 set last week. Boeing is among the 30 companies in the Dow Jones industrial average, and contributed to the Dow's 150 point decline Wednesday.

The Canadian Press


Read more Business News




Recent Trending




Today's Market
S&P TSX15265.35-200.19
S&P CDNX955.06-10.73
DJIA17279.7413.75
Nasdaq4593.426-13.637
S&P 5002010.40-0.96
CDN Dollar0.9147+0.0023
Gold1216.60-10.00
Oil92.41-0.62
Lumber329.00-0.90
Natural Gas3.903-0.064

 
Okanagan Companies
Pacific Safety0.16-0.005
Knighthawk0.01-0.005
QHR Technologies Inc1.37+0.05
Cantex0.05-0.01
Anavex Life Sciences0.223-0.0031
Metalex Ventures0.060.00
Russel Metals35.75-1.26
Copper Mountain Mining2.66-0.02
Colorado Resources0.165-0.01
ReliaBrand Inc0.0249+0.0009
Sunrise Resources Ltd0.02-0.005
Mission Ready Services0.29-0.01

 





FEATURED Property
19943415774 Deadpine Drive
5 bedrooms 5 baths
$1,490,000
more details
image2image2image2
Click here to feature your property
Please wait... loading


Is this a fair offer from ICBC?

“Is this a fair offer from ICBC?”…. “How much should I settle for?”… “What is my claim worth?” These are just some of the questions I regularly get as...


Disruptive innovation

Last night I was privileged to be able to speak at the Greater Westside Board of Trade business awards dinner. Photo: ContributedI talked about Innovation and Collaboration which are two very interes...


Executors and their duties

There will be a time when you will need to decide who you should appoint as executor of your Will. As well, there may be a time when you will be asked by someone to act as the executor of his or her W...

_








Member of BC Press Council


23096