Boeing posts loss, guides lower

Planemaker says labor strike, delivery delays hurt fourth-quarter results. But shares rise on aggressive 'build rate' for commercial airplanes.

EMAIL  |   PRINT  |   SHARE  |   RSS
 
google my aol my msn my yahoo! netvibes
Paste this link into your favorite RSS desktop reader
See all CNNMoney.com RSS FEEDS (close)

v2-cnnmoney-chart1.jpg.mkw.gif
What is hurting you the most?
  • Housing meltdown and foreclosures
  • Job cuts and unemployment
  • Cutbacks in government services

NEW YORK (Reuters) -- Boeing Co. reported an unexpected fourth-quarter loss Wednesday and forecast 2009 earnings well below Wall Street estimates as it grapples with a dip in demand for its planes while airlines feel the pain of recession.

But the plane maker and defense contractor, which is struggling to recover from a two-month strike by its assembly workers, calmed some investors, who had been braced for a worse outlook amid the aerospace sector's severe downturn.

Boeing (BA, Fortune 500) shares, which had fallen about 45% in the past 12 months, rose 2.2% to $44.19 on the New York Stock Exchange.

"The guidance could have been much lower if Boeing had forecast a more conservative build rate for commercial airplanes in 2009," said Macquarie Securities analyst Rob Stallard.

Boeing, which lost out to rival Airbus in the race for plane orders last year, reported a quarterly loss of $56 million, or 8 cents per share, compared with a year-earlier profit of $1.03 billion, or $1.36 per share.

The loss was caused by the 58-day strike by Boeing's machinists union, which straddled the third and fourth quarters, cutting plane deliveries in both, along with extra costs on the delayed 747 and a one-time litigation charge.

Excluding the 747 costs and litigation charge, Boeing reported quarterly profit of 62 cents per share, below Wall Street's average forecast of 78 cents, according to Reuters Estimates.

Revenue fell 27% to $12.7 billion, largely because of the strike, which prevented the delivery of about 70 planes in the quarter.

For 2009, Boeing forecast earnings of $5.05 to $5.35 per share, well below the $5.74 expected by analysts, as airlines struggle to pay for new planes.

It expects delivery of 480 to 485 commercial planes this year. That number would have been much larger if Boeing had stuck to the original timetable for the new 787 Dreamliner, but the plane is now delayed by two years and has still not left the ground.

Boeing repeated its target to make the first 787 test flight in the second quarter of this year and first delivery in the first quarter of 2010.

Correcting problems with fasteners and incomplete work from suppliers on the 787 has gobbled up engineering resources at Boeing's Seattle-area plants. This has hurt progress on the new 747 jumbo, which is now also well behind its original schedule, and will not be delivered until late 2010.

Ailing airlines are adding to Boeing's woes, with many expected to defer or cancel orders outright as travel demand dips in the global recession.

Boeing said one unnamed airline had recently canceled a 787 order and that its Boeing Capital unit would have to provide financing for some purchases this quarter.

It said it now has 895 orders for 787s, as opposed to the 910 it reported at the end of December, suggesting orders for 15 planes have been canceled. To top of page

Features
They're hiring!These Fortune 100 employers have at least 350 openings each. What are they looking for in a new hire? More
If the Fortune 500 were a country...It would be the world's second-biggest economy. See how big companies' sales stack up against GDP over the past decade. More
Sponsored By:
More Galleries
10 of the most luxurious airline amenity kits When it comes to in-flight pampering, the amenity kits offered by these 10 airlines are the ultimate in luxury More
7 startups that want to improve your mental health From a text therapy platform to apps that push you reminders to breathe, these self-care startups offer help on a daily basis or in times of need. More
5 radical technologies that will change how you get to work From Uber's flying cars to the Hyperloop, these are some of the neatest transportation concepts in the works today. More
Sponsors

Most stock quote data provided by BATS. Market indices are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer. Morningstar: © 2018 Morningstar, Inc. All Rights Reserved. Factset: FactSet Research Systems Inc. 2018. All rights reserved. Chicago Mercantile Association: Certain market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. Dow Jones: The Dow Jones branded indices are proprietary to and are calculated, distributed and marketed by DJI Opco, a subsidiary of S&P Dow Jones Indices LLC and have been licensed for use to S&P Opco, LLC and CNN. Standard & Poor's and S&P are registered trademarks of Standard & Poor's Financial Services LLC and Dow Jones is a registered trademark of Dow Jones Trademark Holdings LLC. All content of the Dow Jones branded indices © S&P Dow Jones Indices LLC 2018 and/or its affiliates.