Boeing’s 3rd quarter earnings report to key on 787

Herald staff and Associated Press

The Boeing Co.’s 787 program likely will take center stage Wednesday when the aerospace company reports third-quarter earnings.

Increasing 787 deliveries is key to Boeing’s financial results, so the program’s progress will get much attention. Potential U.S. defense spending cuts, and their impact on Boeing, also could draw questions from investment analysts during a conference call.

Analysts forecast a profit of $1.12 per share, with revenue of $20.1 billion, according to FactSet. Revenue in the same quarter last year was $17.7 billion, hinging on the strength of the company’s defense business.

787 program

Boeing delivered 12 787s in the third quarter — one more than the entire first half of the year. Having dug a hole for itself with delays and cost overruns, Boeing has pegged the break-even point at 1,100 Dreamliner deliveries. With that in mind, Boeing’s goal is to speed up production to a rate of 10 787s per month by the end of 2013.

Company officials likely will field questions on future Dreamliner variants, including the 787-9 and 787-10. American Airlines said last week that delivery of its first 787-9 is being pushed back. Boeing quickly denied a new delay.

Several industry analysts have speculated that Boeing is about to launch a new, larger Dreamliner derivative known as the 787-10. That stretched version would seat about 323 passengers.

Whatever Boeing decides on the 787-10 could have implications for a potential upgrade of the Everett-built 777, noted analyst Daniel Tsang of Aspire Aviation. The 787-10 could “undermine” Boeing’s business case for a 777-8X, which would seat another 30 passengers, Tsang wrote. On the upside, Boeing wouldn’t have to spread engineering resources so thin and eventually could focus on a 407-seat 777-9X.

Boeing’s European rival, Airbus, opened the final assembly line Tuesday for the new A350XWB, Airbus’ challenger to the larger 787s and the 777. First delivery for versions of the A350 have slid to 2016 and 2017.

Defense spending

Boeing and other aerospace contractors are bracing for upcoming spending cuts to the U.S. defense budget unless Congress comes up with an alternative before Jan. 1. Automatic budget cuts, known as sequestration, are expected to shrink the Pentagon’s budget by $50.5 billion, according to a White House report.

Recently, however, Democrats serving on the House Appropriations Committee released a report, signed by Rep. Norm Dicks, D-Wash., that suggests the Defense Department faces a second wave of cuts, for a total of $60.6 billion. In the report, Dicks noted that the government would pay for at least one fewer Boeing P-8A Poseidons. The government also would have $99.5 million fewer dollars to spend on Boeing’s KC-46A tanker, which is based on a commercial 767-jet built in Everett.

Boeing has said it’s been preparing for a decrease in defense spending.