Boeing’s earnings soar 28%

  • BRYAN CORLISS / Herald Writer
  • Wednesday, October 18, 2000 9:00pm
  • Local News

By BRYAN CORLISS

Herald Writer

SEATTLE — Improved performance on the production line led to a 28 percent improvement in the bottom line during the recently concluded third quarter, Boeing officials said Wednesday.

"This high-performance quarter underscores the remarkable transformation of our company and, in particular, the outstanding turnaround of our commercial airplane business," said Phil Condit, chairman and chief executive officer.

Boeing was derided as the "dog of the Dow" after production problems led to a $1.2 billion loss in the last two quarters of 1997.

On Wednesday, however, Boeing announced net earnings of $609 million for the third quarter of 2000, up from a profit of $477 million during the same period last year.

The increase came even though revenue was down about 10 percent compared with last year, falling from $13.3 billion to $11.9 billion.

The performance exceeded expectations of Wall Street analysts. The consensus among Boeing stock watchers was that the company would earn about 67 cents a share. Instead, it earned 72 cents a share, adjusted for one-time expenses.

Last year, Boeing earned 56 cents a share during the third quarter.

A strong order backlog means commercial aircraft production should remain steady through 2001 and into 2002, Condit told stock analysts and reporters.

And Condit said he still expects the company will launch its proposed 747X series of superjumbo planes sometime in early- to mid-2001.

For the quarter, profits in the key Commercial Airplane Group soared. Boeing made $739 million on sales of its jetliners during the quarter, compared with $534 million in the same quarter last year. The profit margin jumped to 9.9 percent, up from 6.2 percent in the comparable period in 1999.

"It’s about performance," Condit said. "I have to tell you, I’m pleased with our team’s performance."

It comes down to "blocking and tackling" on the assembly line, Chief Financial Officer Mike Sears said. Work that’s "planned to be done in Station One is being done in Station One."

And that means reduced time and costs, he explained, because it sharply reduces the need to go back and fix or reinstall parts as the plane moves down the assembly line.

As an example, Condit said, it used to take about 30,000 worker hours to assemble a 737. Now it takes less than 10,000 worker hours.

Boeing revised its year-end revenue projections up to $51 billion, and increased projections for 2001 from $53 billion to $57 billion.

The company has an order backlog big enough to result in the production of about 530 planes in both 2000 and 2001, Condit said.

Boeing won’t get back to record levels of 620 deliveries a year — and doesn’t want to, Condit said. His preference is "incremental growth instead of lots of peaks and valleys."

The biggest increase in orders is for 737s, Condit told analysts. "We’re seeing great strength in the smaller-sized planes," he said. "That’s exactly where we see the market is headed."

Yet Condit said he still expects the company will get its first orders for its superjumbo 747X family of jets early next year.

Boeing has yet to land a launch customer. Rival Airbus Industrie, meanwhile, has lined up orders for 32 of its proposed new 550-seat A3XXs, a plane designed to end Boeing’s lock on the market for jumbo jets.

But Boeing will not go ahead with the new X series planes — including a 520-seat 747X stretch version — if there is no demand for them, Condit said. "We’re not going to go spend money on a market that isn’t there."

For employees, Wednesday’s report is good news, Boeing spokesman Larry McCracken said.

"It means everybody’s performing in an outstanding manner," he said. "It was the performance in the commercial group that contributed, to a significant amount, to the success of the bottom line."

The news helped Boeing stock hold its own on a day when stock markets took a beating. The closing price was $60.75 a share, up 25 cents.

Talk to us

> Give us your news tips.

> Send us a letter to the editor.

> More Herald contact information.

More in Local News

Olivia Vanni / The Herald 
The Mukilteo Lighthouse. Built in 1906, it’s one of the most iconic landmarks in Snohomish County.
The Mukilteo Lighthouse. Built in 1906, it’s one of the most iconic landmarks in Snohomish County. (Olivia Vanni / The Herald)
Mukilteo mayor vetoes council-approved sales tax

The tax would have helped pay for transportation infrastructure, but was also set to give Mukilteo the highest sales tax rate in the state.

Marysville Mayor Jon Nehring gives the state of the city address at the Marysville Civic Center on Wednesday, Jan. 31, 2024, in Marysville, Washington. (Ryan Berry / The Herald)
Marysville council approves interim middle housing law

The council passed the regulations to prevent a state model code from taking effect by default. It expects to approve final rules by October.

x
State audit takes issue with Edmonds COVID grant monitoring

The audit report covered 2023 and is the third since 2020 that found similar issues with COVID-19 recovery grant documentation.

Bothell
Bothell man pleads guilty to sexual abuse of Marysville middle schoolers

The man allegedly sexually assaulted three students in exchange for vapes and edibles in 2022. His sentencing is set for Aug. 29.

Larsen talks proposed Medicaid cuts during Compass Health stop in Everett

Compass Health plans to open its new behavioral health center in August. Nearly all of the nonprofit’s patients rely on Medicaid.

Everett
Judge sentences man, 73, for intending to have sex with ‘teen’ in Everett

The Arizona man sent explicit images to an agent posing as a 13-year-old. Investigators found images of child sexual abuse on his phone.

State’s draft of climate action plan open for public comment

Residents can submit public comments or climate-related stories online through Aug. 22.

Community members gather for the dedication of the Oso Landslide Memorial following the ten-year remembrance of the slide on Friday, March 22, 2024, at the Oso Landslide Memorial in Oso, Washington. (Ryan Berry / The Herald)
The Daily Herald garners 6 awards from regional journalism competition

The awards recognize the best in journalism from media outlets across Alaska, Idaho, Montana, Oregon and Washington.

The Edmonds School Board discusses budget cuts during a school board meeting on Tuesday, April 15, 2025 in Edmonds, Washington. (Olivia Vanni / The Herald)
Edmonds school board approves 2025-26 budget

After facing an estimated $8.5 million shortfall earlier in the year, the board passed a balanced budget Tuesday.

A wall diagram shows the “journey of the ballot” at the new Elections Center on Tuesday, July 9, 2024 in Everett, Washington. (Olivia Vanni / The Herald)
County Auditor: No need for feds to meddle with state or local elections

Garth Fell’s comments were in response to a report of Justice Department mulling criminal charges against election officials.

Edmonds Police Chief Loi Dawkins speaks after the city council approved her appointment on Tuesday, July 8, 2025 in Edmonds, Washington. (Olivia Vanni / The Herald)
Edmonds City Council confirms new police chief

Assistant Chief Loi Dawkins will begin in the role Aug. 1. She has more than 23 years of law enforcement experience, including three years in Edmonds.

The Edmonds City Council discuss the levy during a city council meeting on Tuesday, July 8, 2025 in Edmonds, Washington. (Olivia Vanni / The Herald)
Edmonds votes to place levy lid lift on the ballot

By a vote of 5-2, the council decided to put the $14.5 million property tax levy lid lift to voters in November.

Support local journalism

If you value local news, make a gift now to support the trusted journalism you get in The Daily Herald. Donations processed in this system are not tax deductible.