Boeing CFO tempers plans to double the company’s profit

EVERETT — The Boeing Co.’s chief financial officer Greg Smith tempered the company’s pledges to nearly double its profit margin in the next few years Thursday.

Pushing the aerospace giant’s profits to around 15 percent of revenue is the “right objective,” Smith told the audience at Barclays Industrial Select Conference in Miami Beach, Florida.

However, he cautioned, there might be missteps and unexpected market challenges along the way.

The company has laid out its strategic plan to reach the goal, which CEO Dennis Muilenburg set for Boeing last year, and all major elements of the plan have been assigned to various people in the company. Many details still need to be filled in, Smith said.

Boeing Commercial Airplanes is focused on delivering on its huge backlog of roughly 5,700 orders. Most of those are for its popular single-aisle 737.

The company will decide later this year if it has enough demand to make more 787 Dreamliners. Currently, the company makes them at the rate of 12 airplanes a month between its plants in Everett and North Charleston, South Carolina. That is a record high rate for twin-aisle airplanes.

Boeing executives want to push that to 14 airplanes a month by the end of the decade. However, industry analysts increasingly are skeptical that there is enough demand from airlines and airplane leasing companies to support such high output.

Indeed, several analysts said they expect Boeing to cut back 787 production to eight or even seven airplanes a month in coming years.

Demand for twin-aisle airplanes has softened in the past couple of years, but another boom, driven by the need to replace old aircraft, is coming in the 2020s, Smith said.

“We need to get through this transition,” he said.

Dan Catchpole: 425-339-3454; dcatchpole@heraldnet.com; Twitter: @dcatchpole.