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Boeing flies over Street
October 14, 1999: 12:47 p.m. ET

Aerospace leader says new business, improved production lead to 3Q gains
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NEW YORK (CNNfn) - New business and improved production performance helped Boeing Co., the No.1 aerospace company, fly over Wall Street's earnings expectations Thursday.
     Seattle-based Boeing posted third-quarter operating profit of $477 million, or 56 cents per share, excluding non-recurring items, up from $347 million, or 36 cents a share, a year earlier.
     Analysts polled by First Call Corp. had expected the aerospace firm to earn 49 cents per share.
     Including non-recurring items, Boeing's third-quarter net income was 52 cents a share.
     Revenue for the quarter rose 4 percent to $13.3 billion.
     "Boeing continued on its flight plan in the third quarter. We won considerable new business," said Chairman and CEO Phil Condit said. "We are realizing significant performance improvement in production and are confident in our ability to deliver about 620 commercial airplanes this year."
     Boeing said it expects revenue of $58 billion for the full year 1999, up slightly from $56.2 billion in 1998.
     Earnings for the first nine months climbed to $1.64 billion, or $1.76 per share, from $655 million, or 67 cents per share, a year earlier. Revenue rose10 percent to $42.8 billion.
Still recovering from bottleneck

     But it projected a decline to $49 billion in 2000 as commercial jet sales slump to a projected 480 from a record 620 expected this year.
     The commercial aircraft division posted margins of 5.9 percent. Some analysts had said they were hoping for a figure above 5 percent.
     Boeing predicted an overall operating margin of 5.5 to 6 percent for 1999, which it said was up from a previous forecast.
     It predicted a margin of 5.5 to 6.5 percent in 2000; previously it projected 4 to 5 percent.
     The company, still recovering from production bottlenecks and price discounting that triggered its first full-year loss in 50 years in 1997, has set a goal of 10 percent profit margins under its "value scorecard" introduced in July.
     Analysts were pleased with the third-quarter report but voiced doubts that Boeing would be able to remain as profitable as commercial deliveries decline next year.
     "They beat the Street slightly, which is great. This is the third straight quarter of progress," said analyst Glenn Stewart at AG Edwards.
     "But we're about to hit a downcycle and it will be tough to show nice improvement year-over-year on the annual numbers. The stock hasn't performed well historically during downcycles," he added.
     The company confirmed that it would keep producing 747 jumbo jets at a rate of two per month through 2000, citing improving demand in Asia. Some analysts had speculated that Boeing might cut 747 production.
     Shares of Boeing (BA) were up 2 to 42-1/2 at midday. Back to top
     --from staff and wire reports


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