Boeing’s forecast for 2014 disappoints Wall Street

CHICAGO — The Boeing Co., the world’s largest planemaker, forecast a profit for 2014 Wednesday that fell short of analysts’ estimates as the pace of jet orders slow after the company’s second-best year in 2013.

Earnings excluding some pension expenses will be $7 to $7.20 a share for 2014, the Chicago-based company said in a statement Wednesday. That compares with $7.07 in 2013 and an average estimate of $7.46 in a Bloomberg survey of 23 stock analysts.

That guidance was disappointing to Wall Street, even as the company reported stellar 2013 earnings. In trading Wednesday, Boeing stock closed down 5.3 percent at $129.78 per share.

For all of 2013, Boeing earned $5.96 per share on revenue of $86.62 billion. Revenue rose 7 percent to $23.79 billion. But Boeing is under pressure to top last year’s performance after posting record jetliner deliveries and adding to an order haul that will keep factories humming for almost eight years.

The stock advanced 81 percent in 2013, the most among the 30 stocks listed in the Dow Jones Industrial Average, as Boeing successfully increased 787 production and sales after resolving a battery issue that prompted regulators to ground the Dreamliner fleet for three months.

The company’s fast pace of deliveries was highlighted in the fourth quarter, soaring on faster production tempos for the three best-selling jets. In the final three months of 2013, Boeing delivered 172 planes, an increase of 4 percent from a year earlier. Boeing shipped 648 jets last year, beating rival Airbus, based in Toulouse, France, for a second consecutive year. Boeing garnered 1,531 gross orders, a 14 percent increase from 2012.

There is hope yet that investors might like what they see in 2014. The planemaker has provided conservative forecasts over the past two years, and 2014 results could reach analysts’ estimates if it meets manufacturing targets, said Ken Herbert, managing director with Canaccord Genuity Inc. Boosting revenue could be tougher this year since there are no new jet announcements looming to spur orders as the 777X and 787-10 debuts did in 2013.

“If they continue to execute, you should see nice upside,” Herbert said in a phone interview Wednesday.

Investors are judging whether the company remains an attractive investment for the cash it’s generating or “whether all of the good news is priced into Boeing shares at this point,” Carter Copeland, a New York-based aerospace analyst with Barclays, wrote in a report Monday. Herbert rates Boeing a buy and Copeland assigned it an equivalent rating.

Boeing projects deliveries to rise again in 2014 to between 715 and 725 aircraft, including 110 Dreamliners. Boeing delivered 65 of the mostly composite 787 Dreamliners in 2013.

In the fourth quarter, profit excluding some pension expenses was $1.84 billion, unchanged from a year earlier due a one-time non-cash charge, said Charles Bickers, a Boeing spokesman. Earnings per share rose 29 percent to $1.88 a share, the company said. Analysts projected $1.57 on that basis, the average of 19 estimates compiled by Bloomberg.

Boeing’s backlog grew to a record $441 billion, including $135 billion of net orders during the fourth quarter.

Last year Boeing introduced a profit measure — so-called core earnings per share — that it said gives a clearer picture by adjusting for market fluctuation in pension expenses. Without the adjustment, net income rose 26 percent to $1.23 billion, or $1.61 a share, compared with $978 million, or $1.28, a year earlier.

Boeing also reported a one-time cost of $406 million related to a Jan. 23 agreement it reached with General Dynamics Corp. to provide $400 million in goods and services to the U.S. to settle a 23-year-old dispute over a canceled contract for the A-12 stealth aircraft.

Sales for Boeing’s defense, space and security unit increased 6.1 percent to $8.86 billion from a year earlier, as the company landed overseas contracts. The unit’s operating margin increased to 10.8 percent from 9.0 percent from prior-year results.

The unit’s performance improved despite defense spending cuts in the U.S. “You certainly saw good performance there,” Herbert said. “They certainly worked to take costs out of that business.”

The Associated Press contributed.

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