Wednesday April 22, 05:14 PM
Boeing profit slammed by global downturn
WASHINGTON (AFP) - Boeing said Wednesday first-quarter profits fell 50 percent from a year ago to 610 million dollars, citing a global downturn that presents "unprecedented challenges" for the aerospace company.
The Chicago-based aviation giant also downgraded its outlook for the rest of 2009, saying commercial airplane orders will be weaker than previously anticipated.
The profit amounted to 86 cents per share, below most analyst estimates of 91 cents per share.
Revenues rose 3.0 percent to 16.5 billion dollars amid higher commercial airplane deliveries and higher volume in defence sales.
Boeing said most of its weakness came from civil aviation, with airlines delaying or cancelling new orders in face of a deep global economic crisis.
"The expanded global economic downturn is presenting unprecedented challenges in our commercial airplane markets," said Boeing chairman and chief executive Jim McNerney.
"We believe we are better positioned than most companies to withstand the ongoing pressures of this economy, and we are not hesitating to take necessary actions to preserve our financial strength and maintain our ability to invest and grow for the long term."
Boeing said its profit for all of 2009 is now expected to be in a range of 4.70 to 5.00 dollars per share, down from its earlier range of 5.05 to 5.35 dollars. But it reaffirmed its revenue outlook.
The company said production on its new 787 Dreamliner is on the revised schedule announced in December after a series of delays that hurt the company.
It expects the first flight to occur in the second quarter of 2009 with deliveries to begin in the first quarter of 2010. The 787 is expected to be a key driver of revenue and profit for Boeing.
Boeing saw orders for 32 airplanes cancelled "by mutual agreement with customers" during the quarter. That left the number of orders at 886 airplanes from 57 customers.
Boeing said profits were hurt by reduced margins on commercial planes and by postponing planned increases in 747-8 and 767 production.
The company said profit in its commercial airplane division fell 58 percent to 417 million dollars, with operating margins cut to 4.9 percent from 12 percent a year ago. Part of the reduction came from a "loss position" on its 747 jumbo jet program.
Boeing's defence and space unit earned 709 million dollars, a drop of 18 percent from a year ago, reflecting a "less favourable delivery mix in defence and higher expense for research and development."
The total company backlog or orders at quarter-end was 339 billion dollars, down four percent in the quarter, reflecting lower prices and 787 cancellations, partially offset by new orders for space and defence equipment.
In midday trade, Boeing shares rose 2.07 percent to 37.41 dollars.
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