EVERETT – Despite sliding the first flight of its 787 back a month, the Boeing Co. boosted its 2007 outlook on Wednesday after a better-than-expected second quarter.
“Our results and increased outlook reflect strong markets, preferred products and services, and a focus on execution, growth and productivity,” said Jim McNerney, Boeing’s chief executive. “In short, we are taking on our challenges directly as we continue to realize the company’s potential.”
Increased deliveries of commercial jets contributed to the $17 billion in revenues Boeing pulled in for the second quarter. That’s a 14 percent jump over the same period in 2006. The planemaker saw its net income grow to $1.1 billion.
Wall Street reacted swiftly to Boeing’s strong second quarter, sending Boeing’s stock up more than $3 in early trading to a high of $107.83. It closed at a record high of $107.23, up more than 3 percent for the day.
As a result of its strong showing so far this year, Boeing has raised its 2007 revenue estimates from $64.5 billion to $65 billion. The company’s earnings per share increased from between $4.55 and $4.75 per share to between $4.80 and $4.95.
Boeing’s sizzling second quarter took center stage Wednesday, overshadowing the news that Boeing’s latest jet, its 787 Dreamliner, likely won’t make its first flight for up to a month later than the company previously disclosed.
The fuel-efficient Dreamliner had been scheduled to take flight in late August to mid-September. McNerney extended that timeframe, saying Wednesday that the 787 will make its maiden flight before the end of September.
“We won’t fly the 787 until it’s ready,” McNerney said.
But Boeing’s chief executive said the company will spend additional dollars to ensure the Dreamliner meets its first scheduled delivery to All Nippon Airways of Japan next May.
“We are spending more to meet our commitment,” McNerney said.
Boeing will funnel its extra funding and efforts into three facets: 787 weight reduction, supplier assistance and systems development. The company has added about $400 million to its research and development budget to do so, said James Bell, Boeing’s chief financial officer. Boeing already has begun shifting engineers to other projects – but at a slower rate than anticipated, Bell said.
“We are beyond the invention stage,” McNerney said. “Now that we know how to make the 787, we have to fly it.”
And Boeing has to prove to the Federal Aviation Administration that the 787 is safe to fly.
The company axed months off its flight test certification schedule compared with its last all-new jet, the 777.
The longer it takes to get the Dreamliner in the air, the less time Boeing allows itself to meet that condensed schedule, noted Paul Nisbet, an industry analyst with JSA Research in Rhode Island.
“It’s tightening the schedule,” Nisbet said. “And it already was a very tight schedule.”
Made from mostly carbon fiber composite material, Boeing’s 787 needs to withstand FAA scrutiny of its composite fuselage and wings. It will need to log thousands of hours in flight as well as undergo numerous tests on the ground.
“Getting it certified in that amount of time is going to be no small feat,” Nisbet said.
In Everett, workers are busy finishing several tasks on the first 787, McNerney said.
When the Dreamliner was unveiled in Everett July 8, the plane still lacked many of its systems and flight software. The company eventually expects its global partners to deliver the large assemblies mostly completed with wiring installed. Boeing has a final assembly goal in Everett of completing one 787 every three days.
To work out some of the weight issues, Boeing has changed materials along the plane’s windows and redesigned part of the 787’s wing, Bell said. The company reported last fall that its Dreamliner needed to shed about 5,000 pounds. McNerney estimated the 787 could weigh in at 1 percent to 2 percent over its target.
“Weight is something we’re working on every day,” McNerney said.
However, he insisted that airlines still will see the promised reductions in operating costs compared with similarly sized aircraft on the market. The plane maker continues to see strong demand for its new Dreamliner, winning 683 orders for the 787 since April 2004.
Visit reporter Michelle Dunlop’s aerospace blog to submit your guess on when the 787 will take flight.
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