Boeing registers $192 million loss

The Boeing company reported a whopping $192 million second quarter net loss on Wednesday, hurt by the slump in air travel and a $1.1 billion charge relating to its satellite and launch business.

    Clouds on the horizon at Boeing HQ in Chicago

    The loss translates to 24 US cents a share, narrower than the 43 cents predicted by wall street analysts.

    But the aerospace giant said the steep fall-off in the commercial satellite market and the depressed market for new aircraft would take a toll on its revenues and earnings going forward.

    The company is now predicting for 2003 earnings per share at three cents or a loss of seven cents-a plunge from its previous estimate of 68-88 cents a share.

    For 2004, Boeing skimmed $2 billion off its estimated revenue, revising it downwards from $54 billion to $52 billion.

    The company expects the impact of earnings to shrink per share from a projected $2.30-$2.10 to $1.95-$1.75.

    Gloomy forecast

    Boeing's figures took a beating
    due to a drop in air travel

    In the quarter just ended, group revenues slumped eight percent to $12.79 million from the second quarter of 2002. The company has a gloomy forecast.

    “In the commercial aviation market, while there have been some encouraging signs, the downturn remains severe and continues to dampen demand across all airplane types, particularly the 757,” said the group.

    “The timing of a civil aviation industry recovery remains uncertain and is unlikely to begin before 2005.”

    With the big US carriers still in disarray, Boeing is looking to Asian carriers for new orders but that will depend on Asian air travel recovering from the SARS-induced downturn, said Boeing CEO Phil Condit.

    The company’s commercial airplanes unit is still banking on delivering 280 airplanes this year but it scaled back its 2004 estimate to 275-290 airplanes from a range of 275-300.

    Boeing said it had already sold about 90 percent of the 275 planes being targeted at the lower end of the new range.

    The company said in commercial space the outlook for launch services and satellites remained “poor”, a factor that has led it to re-focus on the government rather than private, launch market.

    Charges related to the group’s launch and satellite business trimmed the group’s net profit by $693 million or 87 percent share during the second quarter.

    The company expects its defence and non-commercial space businesses to move forward.

    Revenues at integrated defence systems, the unit which comprises aircraft and weapons systems, rose seven percent during the quarter to $6.6 billion, although the division’s overall performance was dragged down because of the charge taken against the satellite and rocket business.

    SOURCE: AFP


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