January 28, 2009 in Region

Boeing posts loss, hurt by charges, labor strike

Associated Press
 

PITTSBURGH — Boeing Co., the world’s second-largest airplane maker, swung to a surprise fourth-quarter loss, hurt by a labor strike that disrupted deliveries. It also forecast 2009 earnings that missed Wall Street expectations.

The results come on top of waning demand for the company’s commercial jets. Airlines are cutting spending and air travel has declined amid the global economic slowdown. Boeing recently said it plans to cut about 4,500 positions, or about 3 percent of its work force, as a result of the worsening market conditions.

The Chicago-based company reported a fourth-quarter loss of $56 million, or 8 cents per share, on Wednesday. That compared with profit of $1.03 billion, or $1.36 per share, a year earlier. Results were dragged down by charges totaling $1.79 per share, including the effects of a now-settled machinists strike and delayed deliveries of 747 jets.

Analysts polled by Thomson Reuters, on average, expected earnings of 78 cents in the fourth quarter. Those estimates typically exclude one-time items.

JSA Research analyst Paul Nisbet said the results were “surprisingly poor,” noting the unexpected charge for the new 747 jumbo jet. “I’ll be interesting to hear the explanation for that.”

Fourth-quarter revenue fell 27 percent to $12.68 billion. Passenger and cargo jet deliveries fell by more than half as a strike by production workers paralyzed the company’s Seattle-based commercial aircraft operations for 58 days through early November. Analysts had expected revenue of $13.40 billion in the quarter.

Looking ahead, Boeing expects per-share earnings of $5.05 to $5.35 for 2009, short of the $5.68 forecast by analysts. Boeing’s 2009 revenue outlook of $68 billion to $69 billion was in line with expectations.

Shares of Boeing rose 99 cents, or 2.3 percent, to $44.21 in late morning trade.

The company’s 2009 financial forecast assumes stable deliveries over the next few years of commercial airplanes that are in production. Its commercial aircraft business expects to deliver between 480 and 485 airplanes this year.

Boeing delivered just 50 planes in the last three months of 2008, compared with 112 planes during the same period a year earlier.

In November, Boeing further delayed the first test flight and delivery of its much-anticipated 787 jetliner, the world’s first large commercial airplane made mostly from carbon-fiber composites, blaming the strike and lingering production problems.

It also delayed deliveries of 747-8 cargo and passenger jets, partly due to the strike, and deliveries of 737s, 747s, 767s and 777s as it replaces defective fasteners used to attach wiring and other components inside the planes’ fuselages.

“The progress we made in many areas of Boeing during 2008 was outweighed by the impact of the strike and our performance on some key development programs,” Jim McNerney, Boeing’s chairman, president and chief executive, said in a statement.

To date, Boeing said 58 customers had placed 895 orders for 787s, excluding a recently canceled order from one customer for planes scheduled for delivery late in the next decade.

Boeing, which ranks as the world’s No. 2 airplane maker after France’s Airbus SA, reported 2008 net income of $2.7 billion, or $3.71 per share, down 34 percent from 2007.

Commercial jet orders declined by half in 2008, after three consecutive years of exceptionally strong growth. Still, the aerospace company has orders for a record 3,700 planes.

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