Boeing profits nosedive

Aerospace giant Boeing Co's fourth-quarter profits have plunged 84% due to charges for shutting down production of its 717 jet and losing out on an aerial tanker contract with the Pentagon.

    Delayed airplane deliveries cost Boeing dear during the quarter

    The results reported on Wednesday still easily exceeded Wall Street's expectations as earnings and sales rose at its defence unit, now by far its biggest business.

    But the commercial airplanes division lost money during the quarter on charges and a decline in deliveries.

    For the full year, net income was $1.87 billion (1.43 billion euros), or $2.30 (1.76 euros) per share. That more than doubled the net earnings of $718 million, or 89 cents per share, of 2003 when Boeing took big hits from slumps in both the airline industry and its rocket and launch businesses.

    Revenue climbed 4% to $52.5 billion from $50.3 billion.

    Focus on execution

    "An intense focus on execution led to strongly improved results in 2004," Boeing president and chief executive Harry Stonecipher said. He took over the top job from Phil Condit in 2003 in the wake of several scandals.

    Stonecipher added: "As we enter 2005 our focus remains on business execution, demonstrating our commitment to integrity and growing the business."

    Boeing has significant interests
    in rocket and launch businesses

    Boeing expects to see a further rise in 2007 commercial jet deliveries over the 375-385 forecast range in 2006, the aircraft maker's Chief Financial Officer James Bell said in a conference call.

    CEO Stonecipher later told analysts during the call that he expected orders for the 777 wide-body jet, which is more profitable than the narrow-body 737 line, to play a major role in new orders.

    Net earnings for the October-through-December period were $186 million (142.4 million euros), or 23 cents per share, down from $1.13 billion, or $1.40 per share, a year earlier.

    Analysts surveyed by First Call had estimated earnings at five cents per share.

    Scandal's fallout

    Revenues increased 1% to $13.3 billion (10.2 billion euros) from $13.2 billion.

    Results included a 12-cent tax benefit and charges of 44 cents per share for ending 717 production next year and for expenses on refitting 767s to be used as aerial refuelling tankers for the US Air Force.

    Boeing shares rose 23% in 2004
    on hopes of greater profitability

    Boeing last month indicated it would set aside $615 million to halt production of its 717 passenger jet, the smallest in its line-up, and to cover the costs of scrapping a deal for 767 tanker planes for the US Air Force following a scandal over the terms of a lease arrangement.

    The company estimated 2005 earnings at between $2.40 (1.84 euros) per share and $2.60 (1.99 euros) per share, in line with analysts' expectations of $2.54 per share. Its forecast of $58 billion (44.41 billion euros) was slightly above the
    Wall Street estimate of $57.8 billion (44.25 billion euros).

    Boeing shares rose 86 cents to $51.90 in early trading on the New York Stock Exchange - up 13 cents so far in 2005 after last year's 23% jump.

    SOURCE: Agencies


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