Despite 787 troubles, dream earnings for Boeing

  • By Michelle Dunlop Herald Writer
  • Wednesday, July 24, 2013 3:53pm
  • Business

Boeing Co. executives raised their estimate for company earnings for the year and batted away concerns about a recently damaged 787 and Dreamliner production.

The Chicago-based company boosted its 2013 earnings projection to a range of $6.20 to $6.40 per share, up 10 cents per share from the company’s previous estimate in April. Boeing also beat analyst predictions for second-quarter earnings, reporting on Wednesday a profit of $1.67 per share, topping the $1.58 average estimate of 20 analysts surveyed by Bloomberg News.

Boeing is reaping rewards from a faster assembly pace for 737s, 777s and 787s as a global aviation boom boosts demand for large jets. The planemaker shipped 169 commercial aircraft in the quarter, up 13 percent from a year earlier, including 16 Dreamliners delivered after regulators cleared the plane to fly in April after a three-month grounding.

Jim McNerney, Boeing’s chief executive, downplayed concerns about the company’s 787 program in light of a July 12 fire aboard a Dreamliner parked at London’s Heathrow Airport.

“We remain highly confident in the future of the 787 program and the integrity, safety and performance of the airplane,” McNerney said.

Investigators don’t believe the fire in the parked Ethiopian Airlines 787 is linked to the jet’s main lithium-ion batteries. The 787 was grounded by federal regulators in January after battery systems failed on two 787s. Regardless of the 787’s troubles this year, “support for this airplane remains high,” McNerney said.

McNerney declined to give details about repairs to Ethiopian’s Dreamliner, saying the company and airline still are discussing the matter. The fire in that 787, which apparently started in an off-the-shelf emergency locator transmitter unit, caused more extensive damage than what occurred from the two battery incidents earlier in the year. But Boeing’s CEO was confident in the company’s ability to repair damage to composite fuselages.

“For the last five or six years, we’ve thought about how to repair composite structures when they are damaged,” he said.

Boeing executives also were upbeat about Dreamliner production in Everett and North Charleston, S.C., reiterating the company’s plan to deliver more than 60 787s this year. Twelve of those deliveries will be 787s assembled in North Charleston, said Greg Smith, Boeing chief financial officer. Fifteen of the deliveries will be of the early produced 787s that have been parked around Everett’s Paine Field, awaiting modifications. The remainder of the 787 deliveries this year will be off the Dreamliner assembly line in Everett, Smith said.

CEO McNerney acknowledged a slip in schedule on the newest version of the Dreamliner, the longer 787-9. The company began assembly this spring in Everett. Boeing is preparing to flight-test the 787-9 but has pushed delivery of the first airplane back to mid-2014, rather than early next year.

McNerney said he’s “bullish” about Boeing’s widebody jet lineup, including an updated 777X. Formal launch of that re-engined aircraft is still on target for later this year. Boeing won’t announce a decision on where it will build the 777X’s composite wing for two to six months after the launch. Washington leaders have been busy paving the way for Boeing to build a new 777X facility in Everett if the company chooses to do so.

Wall Street responded positively Wednesday to Boeing’s earnings, pushing shares to a 52-week high of $109.49 before they fell to $106.95, a drop of 84 cents for the day. The stock has advanced 43 percent this year through yesterday, topping a 19 percent gain for the Standard &Poor’s 500 Index.

“Boeing is going to generate a tremendous amount of cash over the next few years,” Peter Arment, a Birmingham, Ala.-based analyst with Sterne Agee &Leach Inc., said Wednesday in a telephone interview. “This quarter is the beginning of evidence of that.”

Operating cash flow doubled to $3.5 billion as Boeing increased sales and factories worked more efficiently. The company also repurchased 10.2 million shares valued at about $1 billion and paid $400 million in dividends, a 12 percent increase from a year earlier.

“Investor focus has switched to Boeing’s cash flow,” Robert Stallard, a New York-based aerospace analyst with RBC Capital Markets, wrote in a research note Wednesday. While cash generation “was strong, we would have expected the company to have been more aggressive on the buyback in the quarter. Presumably this leaves plenty of firepower for future buybacks or dividend increases.”

Bloomberg News contributed to this report. Michelle Dunlop: 425-339-3454; mdunlop@heraldnet.com.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Business

Black Press Media operates Sound Publishing, the largest community news organization in Washington State with dailies and community news outlets in Alaska.
Black Press Media concludes transition of ownership

Black Press Media, which operates Sound Publishing, completed its sale Monday (March 25), following the formerly announced corporate restructuring.

Maygen Hetherington, executive director of the Historic Downtown Snohomish Association, laughs during an interview in her office on Thursday, Feb. 15, 2024, in Snohomish, Washington. (Ryan Berry / The Herald)
Maygen Hetherington: tireless advocate for the city of Snohomish

Historic Downtown Snohomish Association receives the Opportunity Lives Here award from Economic Alliance.

FILE - Washington Secretary of State Steve Hobbs poses in front of photos of the 15 people who previously held the office on Nov. 22, 2021, after he was sworn in at the Capitol in Olympia, Wash. Hobbs faces several challengers as he runs for election to the office he was appointed to last fall. (AP Photo/Ted S. Warren, File)
Secretary of State Steve Hobbs: ‘I wanted to serve my country’

Hobbs, a former Lake Stevens senator, is the recipient of the Henry M. Jackson Award from Economic Alliance Snohomish County.

Mark Duffy poses for a photo in his office at the Mountain Pacific Bank headquarters on Wednesday, Feb. 14, 2024 in Everett, Washington. (Annie Barker / The Herald)
Mark Duffy: Building a hometown bank; giving kids an opportunity

Mountain Pacific Bank’s founder is the recipient of the Fluke Award from Economic Alliance Snohomish County.

Barb Tolbert poses for a photo at Silver Scoop Ice Cream on Thursday, Feb. 29, 2024 in Arlington, Washington. (Annie Barker / The Herald)
Barb Tolbert: Former mayor piloted Arlington out of economic brink

Tolbert won the Elson S. Floyd Award, honoring a leader who has “created lasting opportunities” for the underserved.

Photo provided by 
Economic Alliance
Economic Alliance presented one of the Washington Rising Stem Awards to Katie Larios, a senior at Mountlake Terrace High School.
Mountlake Terrace High School senior wins state STEM award

Katie Larios was honored at an Economic Alliance gathering: “A champion for other young women of color in STEM.”

The Westwood Rainier is one of the seven ships in the Westwood line. The ships serve ports in the Pacific Northwest and Northeast Asia. (Photo provided by Swire Shipping)
Westwood Shipping Lines, an Everett mainstay, has new name

The four green-hulled Westwood vessels will keep their names, but the ships will display the Swire Shipping flag.

A Keyport ship docked at Lake Union in Seattle in June 2018. The ship spends most of the year in Alaska harvesting Golden King crab in the Bering Sea. During the summer it ties up for maintenance and repairs at Lake Union. (Keyport LLC)
In crabbers’ turbulent moment, Edmonds seafood processor ‘saved our season’

When a processing plant in Alaska closed, Edmonds-based business Keyport stepped up to solve a “no-win situation.”

Angela Harris, Executive Director of the Port of Edmonds, stands at the port’s marina on Wednesday, Jan. 24, 2024, in Edmonds, Washington. (Ryan Berry / The Herald)
Leadership, love for the Port of Edmonds got exec the job

Shoring up an aging seawall is the first order of business for Angela Harris, the first woman to lead the Edmonds port.

The Cascade Warbirds fly over Naval Station Everett. (Sue Misao / The Herald file)
Bothell High School senior awarded $2,500 to keep on flying

Cascade Warbirds scholarship helps students 16-21 continue flight training and earn a private pilot’s certificate.

Rachel Gardner, the owner of Musicology Co., a new music boutique record store on Thursday, Jan. 18, 2024 in Edmonds, Washington. Musicology Co. will open in February, selling used and new vinyl, CDs and other music-related merchandise. (Olivia Vanni / The Herald)
New Edmonds record shop intends to be a ‘destination for every musician’

Rachel Gardner opened Musicology Co. this month, filling a record store gap in Edmonds.

MyMyToyStore.com owner Tom Harrison at his brick and mortar storefront on Tuesday, Sept. 6, 2022 in Everett, Washington. (Olivia Vanni / The Herald)
Burst pipe permanently closes downtown Everett toy store

After a pipe flooded the store, MyMyToystore in downtown Everett closed. Owner Tom Harrison is already on to his next venture.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.