In this Feb. 17 photo, Boeing CEO Dennis Muilenburg talks with President Donald Trump at Charleston International Airport in North Charleston, South Carolina. (AP Photo / Susan Walsh)

Muilenburg: Boeing remains on track to keep boosting profits

EVERETT — The cash is going to keep coming.

That was Boeing CEO and Chairman Dennis Muilenburg’s key message at a Wall Street conference Thursday morning.

The aerospace giant is making steady progress on pushing its profit margin to historic highs, a goal set by Muilenburg after taking over the company’s helm in 2016. The target is to hit about 15 percent operating profit by 2020 — essentially twice its average over the past 10 years.

“We’re very committed to that target,” he told the audience at the Bernstein Strategic Decisions Conference in New York.

Boeing expects to bring in less revenue by the end of its second quarter, which covers April, May and June. The decline is due to delaying deliveries of some new airplanes, chiefly Boeing’s KC-46, a new aerial refueling tanker for the Air Force.

While tankers are rolling out of the Everett plant where they are assembled, the company does not expect to start handing over the planes to the military until late this year.

Over the next few years, ramping up production of the company’s single-aisle 737 and making more of higher-priced 787s are expected to play a big role in boosting revenue and profit, Muilenburg said.

Boeing will sell more and more of the its 787-9s and 787-10s, and less of the smallest Dreamliner, the 787-8. The larger -9 and -10 versions are bigger money makers for the company.

The company is still testing the 787-10. The third production aircraft is already being manufactured, he said.

Boeing continues talking with customers about creating a bigger version of its popular single-aisle 737 — a MAX 10 to compete with rival Airbus’ A321neo. A MAX 10 “would basically be the same size of an A321 with “about 5 percent lower operating cost per seat” due to weight savings,” Muilenburg said.

If Boeing follows through on the MAX 10, it could make up as much as 25 percent of 737 sales and would first deliver to an airline probably in 2020, he said.

Boeing sees an upside beyond its commercial airplanes division, which is based in Washington.

Defense and satellite sales are expected to increase, Muilenburg said.

The company even has seen renewed interest in the two fighter jets it produces — the F-15 and F/A-18. Just a couple years ago, many industry watchers expected the F-15 line to close in the next few years.

Since then, Boeing has seen spurred interest from foreign customers that could have the F-15 line “extended in a strong way well into the next decade,” he said.

And greater demand for the F/A-18 from the U.S. and allied militaries means “that line could very well be strong and healthy through the next decade,” Muilenburg said.

This story has been modified to clarify the Boeing Company’s expected lowered operating costs resulting from improvements to the MAX 10.

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

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