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Published: Monday, January 6, 2014, 8:34 a.m.

Despite 787, Wall Street loved Boeing in 2013

Company deivered record 648 airplanes

  • CLICK TO ENLARGE

    Chuck Taylor / The Herald

    CLICK TO ENLARGE

The Boeing Co. has invented an anti-gravity device, and it's called a share of stock.
In 2013, shares rose in value a whopping 77.1 percent -- despite a year half-full of bad news.
A year ago, it didn't seem as if things could get worse for the 787 program, and yet it did. In January, just a few months after entering service, Dreamliners were grounded for 100 days after two high-profile thermal events involving the lithium-ion battery system. And in the summer, another fire, unrelated to the battery system, severely damaged a 787 parked in London. (Boeing is still discretely repairing that plane, by the way.)
And yet the company's stock steadily climbed. In fact, Boeing was the best-performing stock last year in the Dow Jones Industrial Average. That's saying something, because the overall market logged its best gain since 1997. The Dow Jones average of which Boeing is part was up 26.5 percent in 2013.
So what about all the bad headlines? Wall Street seemed confident that Boeing could solve the 787 problems, and it couldn't ignore some impressive metrics:
  • The company has a backlog of 5,080 unfilled orders worth more than $415 billion, including 3,456 for the soon-to-be-refreshed 737.
  • Cash flow in the first three quarters of 2013 about doubled compared to the same period in 2012, and the operating profit was greater than 11 percent.
  • The company had a strong launch for the 777X program at the Dubai Airshow in November. It has 45 firm orders and 214 commitments for the next derivative of the 777.
Boeing will report financial results for the fourth quarter and all of 2013 on Jan. 29.
Chuck Taylor: 425-339-3429; ctaylor@heraldnet.com.

Key Boeing events in 2013

Jan. 7, 2013: The lithium-ion battery system of Japan Airlines Boeing 787 catches fire while the airplane is parked in Boston.
Jan. 11, 2013: The Federal Aviation Administration says it will conduct a review of the design of 787 electrical systems.
Jan. 16, 2013: The FAA grounds all 50 in-service Boeing 787s after a second battery-related incident prompted a precautionary landing by an All Nippon Airways plane in Japan.
Feb. 19, 2013: In a vote, engineer members of the Society of Professional Engineering Employees in Aerospace (SPEEA) approve a Boeing contract offer, but technical workers reject theirs. In all, the union represents 22,950 workers.
March 15, 2013: Boeing explains how it will redesign the lithium-ion battery system on the 787. Planes remain grounded.
March 18, 2013: SPEEA technical workers vote to accept the original contract offer after Boeing declined to negotiate further. Boeing increases 737 production in Renton from 35 to 38 airplanes per month.
April 19, 2013: Boeing adjusts the 747 production rate from 2 per month to 1.75 per month, due to decreased demand.
April 26, 2013: The FAA lifts the grounding order for 787s. Planes need to be retrofitted with the new battery system before flight.
April 27, 2013: Boeing 787 passenger service resumes at Ethiopian Airlines.
May 14, 2013: Boeing resumes delivery of new 787s which have the new battery system installed in the factory.
May 20, 2013: United Airlines, the only U.S. operator of 787s, resumes Dreamliner passenger flights.
June 18, 2013: At the Paris Air Show, Boeing officially launches the 787-10, the biggest of the Dreamliner family.
June 26, 2013: Boeing begins to assemble the first KC-46A aerial-refueling tanker, a 767 derivative to be delivered in 2016.
July 12, 2013: An Ethiopian Airlines 787 parked in London catches fire, apparently caused by an off-the-shelf emergency locator beacon. The Dreamliner's carbon-fiber fuselage sustains significant damage.
Sept. 5, 2013: The Air Force signs off on the design of the Boeing KC-46A tanker.
Sept. 17, 2013: First flight of the 787-9, the mid-sized Dreamliner.
Oct. 7, 2013: Japan Airlines announces it will buy Airbus A350s. It's the first time the carrier has chosen Airbus over Boeing.
Oct. 18, 2013: Boeing adjusts the 747 production rate for the second time in 2013, from 1.75 planes per month to 1.5.
Oct. 22, 2013: Assembly of the third KC-46A tanker commences.
Oct. 30, 2013: Boeing announces that it will disperse engineering work for the 777X to six cities, omitting Everett and saying that "no decisions have been made about 777X design or build in Puget Sound."
Oct. 31, 2013: Boeing says it will increase the 737 production rate to 47 planes per month in 2017.
Nov. 5, 2013: The International Association of Machinists and Aerospace Workers (IAM) and Boeing announce a secretly negotiated contract extension that would guarantee labor peace until 2024 and place 777X assembly in Everett. But rank-and-file reaction, including leaders of District 751, is swift and negative.
Nov. 9, 2013: The Washington Legislature passes Boeing-friendly legislation, including tax breaks worth $8.7 billion, that depend on the company siting 777X manufacturing in the state.
Nov. 13, 2013: Machinists vote down Boeing's contract extension by a 2-to-1 margin.
Nov. 17, 2013: Boeing announces the launch of the 777X program with 259 orders or commitments worth almost $100 billion at list prices.
Nov. 23, 2013: Boeing says it has sent more than a dozen states requests for proposals of incentives for siting 777X manufacturing.
Dec. 6, 2013: Missouri lawmakers approve tax breaks and other incentives worth $1.7 billion to entice Boeing to build the 777X there.
Dec. 9, 2013: Boeing and Machinists quietly resume talks.
Dec. 10, 2013: Twenty-two states submit to Boeing proposals offering 54 sites for 777X manufacturing.
Dec. 12, 2013: Renewed talks between Boeing and the IAM break off after union representatives reject the company's "best and final" offer.
Dec. 13, 2013: Boeing announces plans to expand facilities in South Carolina, leasing more land in North Charleston.
Dec. 21, 2013: National IAM leaders order District 751 to hold a vote on Boeing's offer on Jan. 3, 2014. In that election, Machinists approve Boeing's offer, 51 percent to 49 percent.

The Boeing Co.

Headquarters: Chicago
Web: www.boeing.com
NYSE stock ticker: BA
Market capitalization: $103.4 billion
Friday close: $137.62
52-week high: $142.00
52-week low: $72.68
Closing-price change in 2013:+77.1%

2013 firm net orders

737747767777787Total
1,0461221131821,355

2013 deliveries

737747767777787Total
44024219865648

Backlog

Unfilled firm orders.
737747767777787Total
3,68055493809165,080
 
Story tags » BoeingStock Market

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