SEATTLE: Boeing, the world’s second- largest commercial-plane maker, said Wednesday that profit will rise this year and cash flow will recover in 2011 as deliveries of the delayed 787 Dreamliner and 747-8 jumbo jet begin.Profit will increase to US$3.70 (RM12.60) to US$4 a share from US$1.84 a share in 2009, Boeing said in a statement. In 2011, revenue will rise with the new aircraft and cash flow will be more than US$5 billion, compared with about zero this year. The Chicago-based company reported fourth-quarter earnings that beat analysts’ estimates after a year-earlier loss.
“We have not been expecting cash to bounce back so fast,” Joseph Nadol, an analyst with JPMorgan Chase wrote in a note to investors Wednesday. Boeing shares made their biggest intraday gain since August. Delays to the 787 Dreamliner, which flew last month for the first time, and to the new 747-8 jumbo jet set to fly in coming days increased costs and delayed incoming revenue for Boeing. Both planes are scheduled for delivery by year-end after multiple setbacks. About 60 per cent of a jet’s purchase price is paid upon delivery.
Boeing, coping with a drop in orders from airlines after a global recession hurt air travel, said revenue this year will be held back as it cuts production of its twin-aisle 777 jet in June and as the Pentagon limits some Boeing military programmes.
The 2010 profit forecast is based on sales of US$64 billion to $66 billion, down from US$68.3 billion in 2009. The figure trails the US$4.25 average estimate for 2010 from analysts in a Bloomberg survey. Nadol wrote that Boeing’s guidance was expected to be “well below consensus.” The forecast was the first for 2010, which Boeing normally would have given a year ago.
The first quarter will be the weakest because of timing issues and will make up about 15 per cent to 20 per cent of the full-year earnings, Chief Financial Officer James Bell said on a conference call. That would be about 56 cents to 80 cents a share, compared with an average estimate for US$1.06 a share according to analysts surveyed by Bloomberg.
Fourth-quarter net income of US$1.27 billion, or US$1.75 a share, compared with a net loss of US$86 million, or 12 cents, a year earlier, Boeing said.
Sales rose 42 per cent to $17.9 billion, rebounding after a two-month strike in 2008 that idled Seattle-area factories. The average profit estimate was US$1.37 a share in a Bloomberg survey of 20 analysts.
Commercial deliveries will fall to 460 to 465 aircraft this year, after 481 aircraft were shipped to customers in 2009, Boeing said.
Toulouse, France-based Airbus SAS had 498 shipments last year, retaining the title it has held since 2003 as largest commercial-plane builder.
Boeing’s commercial backlog fell to 3,375 aircraft valued at US$250 billion, from US$254 billion at the end of September, and orders will probably trail deliveries again this year, after just 142 net orders last year, chief executive officer Jim McNerney said on the call.
Demand is improving “somewhat” after 121 orders were cancelled and 271 planned deliveries were deferred in the past year, McNerney said. Delivery slots are sold out for 2010 and overbooked in 2011, and there’s “continued strength beyond that,” leading him to leave production plans unchanged for the best-selling 737.
Boeing expects to provide less than US$500 million this year in direct financing to customers with contracts to buy planes who haven’t been able to secure funding elsewhere by the delivery dates. Financing will drop from $766 million last year because other funding sources for the industry have become more readily available, McNerney said. — WP-Bloomberg