By Michelle Dunlop Herald Writer
The Boeing Co.’s better-than-expected fourth-quarter earnings mean a big payout for local workers Feb 18. The profits also helped boost the company’s stock on Wednesday.
Boeing beat analysts’ estimates for the final quarter of 2009, reporting a net income of $1.25 billion, or $1.75 per share. After plunging into the red in the third quarter, Boeing’s fourth-quarter performance ensured that 114,000 workers companywide will receive a February incentive payout.
Eligible employees, both former and current, will receive up to seven days’ worth of additional pay.
“While we encountered a variety of challenges in 2009 that affected our overall financial results, our core operating performance remained strong thanks to employees’ continued focus on first-time quality, productivity and support for our customers,” said Jim McNerney, Boeing’s president and chief executive, in a message to employees.
Boeing didn’t have the final number of eligible employees in the Puget Sound region. Last year, Boeing paid out up to six days’ equivalent of extra pay, worth $96.5 million to roughly 48,000 Washington workers, said Todd Blecher, company spokesman. That’s an average of more than $2,000 per person. Boeing’s Machinists, who received a $1,500 payment in November as negotiated in their contract, won’t receive this incentive payment.
For the full year of 2009, Boeing’s revenues rose to $68.3 billion, compared to $60.9 billion in 2008, which saw a three-month labor stoppage. The company’s earnings dropped to $1.84 per share, compared to $3.67 per share in 2008, due to a previously reported $3.58 charge for the company’s 747 and 787 commercial jet programs.
Analysts polled by Thomson Reuters had pegged the aerospace giant’s fourth-quarter profit at $1.36 per share. Investors rewarded Boeing for its performance, sending the company’s stock up 7.3 percent, or $4.22 per share, to close at $61.93.
Wednesday’s good news was tempered, however, with modest earnings estimates for this year.
Boeing estimated its 2010 earnings at $3.70 to $4 per share, due in part to its plan to cut its 777 jet production. Boeing plans to deliver between 460 and 465 commercial airplanes in 2010, compared to 481 in 2009. Analysts had expected an outlook of $65.42 billion in earnings, or $4.26 per share.
Boeing sees its revenues rising in 2011 as the company begins to ramp up deliveries of its delayed 787 and 747-8 jets. Boeing reiterated its plan to make initial deliveries of both aircraft late this year.
“We are achieving important milestones toward getting (the 787 and 747-8) into customer hands,” McNerney said.
After more than two years of delays, Boeing flew its fuel-efficient 787 for the first time Dec. 15. Flight testing for the 787 has not revealed any major problems with the fuel-efficient airplane. The company expects to put the third and fourth flight test 787s in the air in February, McNerney said.
“So far, so good. We have not discovered anything significant,” he said.
The company’s revitalized 747-8 jumbo jet will take its maiden flight in the “very near future,” McNerney said.
Although observers speculated that Boeing may slash production rates on its Renton-built 737 aircraft, Boeing’s McNerney said the company will hold rates steady on its popular single-aisle jet.
Boeing’s airline customers weathered a rough 2009, experiencing a significant downturn in air traffic. As a result, Boeing accommodated 271 aircraft delivery deferrals last year but saw a decreasing number of requests as the year went along, McNerney said. The value of the company’s commercial airplane order backlog stands at $250 billion.
Although Boeing’s McNerney is encouraged by opportunities in commercial airplanes, he sees the company winning fewer requests for new airplanes in 2010 than the number of aircraft it will deliver this year.
Boeing’s positive fourth-quarter seems to have appeased many Wall Street and industry analysts even if its 2010 estimates disappoint.
Morningstar analyst Brian Nelson believes much of the potential troubles for Boeing’s 787 and 747-8 are behind the company but left open the possibility of unknown issues popping up in flight testing. The analyst also estimates that Boeing is more likely to deliver its first 787 in early 2011 rather than late 2010.
Still, “we think Boeing is glad to put 2009 behind it, and we expect 2010 to be a much better year on the operational and execution front,” Nelson wrote in a note to investors.