Boeing profit view meets estimates as 787 probe drags

, Bloomberg

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Boeing Co. predicted earnings that met analysts' estimates this year, assuming no drag from the grounding of its marquee 787 Dreamliner jet that's stretching into a third week while investigators examine battery faults.

Net income for 2013 will be $5 to $5.20 a share, based on an assumption of "no significant impact" from the 787's woes, Chicago-based Boeing said today in a statement. That compares with an average estimate of $5.16 in a Bloomberg survey of 25 analysts and $5.11 in 2012.

Boeing gave the forecast still lacking a timetable for when Dreamliner deliveries can resume, clouding the future of the company's most technologically advanced jet just 16 months after its debut. Regulators ordered airlines to park the 50 planes in service worldwide on Jan. 16 after a battery fire on one jet and an emergency landing by another.

"Our first order of business for 2013 is to resolve the battery issue on the 787 and return the airplanes safely to service with our customers," chief executive officer Jim McNerney said in the statement.

While deliveries have been halted, 787 production is continuing, Boeing said. The planemaker predicted shipments of more than 60 Dreamliners this year among a total of 635 to 645 commercial planes, up from 601 in 2012, as it increases airliner output more than 60 percent in the four years through 2014.

The forecast trailed an estimate of 663 deliveries this year from Jefferies Group Inc., noted Howard Rubel, a New York-based analyst with a buy rating on the stock.

Cash Forecast

"The biggest swing item will be the 787," he said in a note. "Given the current production rate of five per month for the 787, coupled with aircraft coming out of rework, we believe this set the low-water mark."

The light revenue guidance and lower-than-expected 787 deliveries are countered by a solid cash forecast, said Rob Stallard, an analyst with RBC Capital Markets in London who rates the stock outperform. Analysts including Stallard had expected Boeing to deliver about 93 Dreamliners this year.

Operating cash flow, which is driven by deliveries, was $7.5 billion last year and will be greater than $6.5 billion this year, Boeing said. Carriers pay about 60 percent of the price of a plane in installments after they place an order and the rest upon receiving the plane.

Pension Costs

"Delivering at least 60 787s implies that we could stay at the current production rate of five a month and not necessarily ramp up to double production by the end of the year," Christian Mayes, an analyst with Edward Jones & Co. in St. Louis, said today. "That might actually give suppliers more breathing room."

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