By Michelle Dunlop Herald Writer
Nearly 48,500 Boeing Co. workers in Washington will receive bonuses of about 15 days of pay, thanks to the company’s strong performance last year.
Boeing net income in the fourth quarter jumped 20 percent on increased aircraft deliveries, the company said Wednesday. Boeing reported a net income of almost $1.4 billion, or $1.84 per share. That beat Wall Street’s expectations of $1 per share.
“2011 was a pivotal year for our company,” said Jim McNerney, Boeing’s chief executive officer, in a conference call from company headquarters in Chicago.
Last year, Boeing delivered 477 aircraft, up from 462 the previous year. Among the aircraft handed over in 2011 were the first deliveries of the new 747-8 and 787, both of which had suffered multi-year delays. The company also had its best sales year since 2007 and landed a $35 billion contract supplying the U.S. Air Force with aerial-refueling tankers.
Having exceeded performance goals for the year, Boeing said many workers would get bonuses of the equivalent of 15 to 16 days of pay, depending on position. Members of the Machinists union aren’t eligible for the payout, which will occur about Feb. 16. Machinists negotiated a separate bonus program.
Last year, non-Machinist Boeing workers received 14 days of incentive pay, which averaged about $5,000 per employee.
For 2012, Boeing is predicting a profit of between $4.05 and $4.25 per share. But Boeing faces challenges in rising pension costs and a weak defense market. The company said defense revenue will fall in 2012.
But for the first time in a decade, Boeing could take back the title from Airbus of the world’s biggest jet maker in 2012. The company estimates it will deliver between 585 and 600 commercial jets in 2012. Of those, 70 to 85 will be 787s and 747-8s, split equally.
“We’re confident in the number of 747s and ’87s we’ve predicted to deliver,” McNerney said.
McNerney reiterated on Wednesday Boeing’s plan to reach a production pace of 10 787s per month by the end of 2013. Boeing is at a pace of two-and-a-half 787s monthly and is moving to three-and-a-half in the next quarter, McNerney said.
Boeing already has dozens of 787s built in Everett and parked throughout Paine Field. However, those early-built aircraft each require several weeks’ worth of additional work to incorporate changes made to the 787 design during the model’s flight-test program.
Analyst Scott Hamilton of Leeham Co. in Issaquah thought Boeing’s estimate for 787 deliveries was low, but “the amount of rework for the airplanes is great and is simply slowing down deliveries.”
By mid-year, Boeing expects to produce the first 787 off the line that doesn’t require additional changes.
Boeing is looking at ways to improve 787 profitability, which was in the single digits for Dreamliners delivered last year, said Greg Smith, Boeing’s new chief financial officer. Smith replaces Boeing CFO James Bell, who is retiring at the end of the quarter.
After Boeing reaches the desired assembly pace on the 787 and production stabilizes, “we will consider rates above 10 per month,” Smith said.
Hamilton noted that Boeing could build 10 787s monthly in Everett if it retained not only the original production line but also a “surge” line, which originally was put in place until the company’s South Carolina facility came up to speed. That facility has the capacity to produce seven 787s monthly, he noted.
“I could very easily see, at the second half of the decade, Boeing moving up to 14 to 17 787s monthly,” Hamilton said.
However, he and other analysts continue to have doubts about Boeing’s ability to reach a rate of 10 787s per month by the end of 2013, noting the company’s difficulty in meeting previous program goals.
“I am not convinced that the production ramp-up is going as smoothly as they predicted,” Hamilton said.
Boeing shares closed at $75.82 on Wednesday, down 46 cents on the day.
Herald writer Michelle Dunlop: 425-339-3454 or firstname.lastname@example.org.
The Associated Press contributed to this report.