Associated Press and Bloomberg News
CHICAGO — The Boeing Co. reported annual revenue of more than $100 billion for the first time and shares soared after the company easily beat Wall Street’s profit and sales expectations for the fourth quarter.
The big numbers from the plane maker, which is heavily exposed to a trade standoff between the U.S. and China, pushed the Dow higher at the opening bell Wednesday.
Sales rose across all businesses at the end of the year, pushing annual revenue to $101.1 billion. The defense division’s 16 percent sales gain in the fourth quarter softened the blow from factory stumbles that slowed deliveries of the workhorse 737 jetliner, Boeing’s biggest source of profit.
Costly out-of-sequence work on commercial aircraft weighed on results, dragging free cash flow down to $2.45 billion in the fourth quarter. Analysts had predicted $2.52 billion.
U.S. and Chinese negotiators start two days of high-level talks Wednesday aimed at settling a six-month trade war that has weakened both sides, shaken financial markets and clouded the outlook for the global economy.
The Trump administration has imposed penalty tariffs on steel and aluminum imports from a number of countries and on $250 billion of Chinese imports as the administration seeks to apply pressure to other countries to reduce their barriers to American exports. China and other nations have retaliated by imposing penalty tariffs on U.S. exports, sparking a tit-for-tat trade war.
In that environment, Boeing in the final three months of the year delivered 238 commercial airplanes in the quarter, up 14 percent from the same period last year. Boeing delivered a record 806 commercial planes last year, up 6 percent from the prior year, and it expects more of the same in 2019, projecting deliveries of between 895 and 905 commercial aircraft. Increased jetliner production is crucial to Boeing’s plans to boost cash flow.
Boeing and Airbus, its European rival, are riding high on a historic sales boom rooted in low interest rates and a growing middle class, particularly in Asia.
Boeing sold more commercial aircraft than it made in 2018, tallying 893 orders with a value of $143.7 billion. Repeating that performance this year will be tougher as the company targets delivering a record 895 to 905 jetliners while navigating a global economy fraught with geopolitical risk.
The Boeing Co. had net income of $3.42 billion, or $5.93. Earnings, adjusted for non-recurring gains, came to $5.48 per share, easily topping the per-share profit of $4.52 that industry analysts were looking for, according to a poll by Zacks Investment Research. Boeing reported core earnings per share of $5.07 for the same period last year.
The Chicago company’s revenue of $28.34 billion also breezed past projections of $26.65 billion and topped last year’s fourth quarter of $24.77 billion.
Boeing expects full-year 2019 earnings in the range of $19.90 to $20.10 per share, with revenue in the range of $109.5 billion to $111.5 billion.
Boeing shares took off at the opening bell Wednesday, rising 6 percent. Shares have been knocked during the impasse between Washington and Beijing, but they’re up 13 percent this year.
Portions of this story were generated by Automated Insights using data from Zacks Investment Research. Access a Zacks stock report.