Wednesday October 21, 03:30 PM
Boeing disappoints with loss of $1.56bln
By Rob Lever
WASHINGTON (AFP) - Boeing (NYSE: BA - news) announced a disappointing quarter Wednesday, posting a loss of 1.56 billion dollars on hefty charges to modify its 787 Dreamliner and the new version of its 747 jumbo jet.
Although the charges had been previously announced, the loss amounting to 2.23 dollars per share for the third quarter was steeper than anticipated by analysts.
Revenues in the third quarter, up 9.1 percent at 16.7 billion dollars, were also below market expectations.
"The 787 cost reclassification and the 747 charge for increased costs and difficult market conditions clearly overshadowed what continues to be otherwise solid performance across our commercial production programs and defense business," said Boeing chairman and chief executive Jim McNerney.
"We look forward to getting the 787 and 747-8 in the air soon and moving forward with flight test and certification for these two important programs."
Because of the problems on the two aircraft, Boeing sharply cut its profit outlook for 2009 to between 1.35 and 1.55 dollars per share, from a previous range of 4.70 to 5.00 dollars. But it maintained projections for revenues and aircraft deliveries.
The weaker-than-anticipated results drew sharp criticism from analyst Douglas McIntyre at 24/7 Wall Street.
"Financial results and news out of Boeing has been getting worse by the month as the company delayed its new 787 and a revamped version of the 747," he said.
"It is clear now that the board of Boeing must ask Jim McNerney to leave as CEO. He has already pushed out his head of commercial aircraft which leaves no one else for the board to blame."
Shares in Boeing slumped 1.5 percent in early trades to 51.10 dollars.
Boeing had announced on June 23 a fifth delay in the 787 Dreamliner program to fix a structural problem on the side of the aircraft, which is seen as key to the company's future.
The much-delayed 787 Dreamliner airplane will be delivered to Japanese launch customer ANA in late 2010, more than two years behind the initial timetable.
In October, the Chicago-based company announced a one billion dollar charge against third-quarter earnings due to increased production costs and a difficult market for its 747-8 program.
The Boeing Commercial Airplanes unit suffered an operating loss of 2.8 billion dollars due to the charges, even though revenues increased 13 percent to 7.9 billion dollars.
Boeing Integrated Defense Systems had an operating profit of 885 million dollars as revenues rose three percent to 8.7 billion for the unit focused on military and space operations.
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