Posted on 02/02/2006 12:52:51 PM PST by Paleo Conservative
If you think last year was a good year for The Boeing Co., wait until you see 2006 and 2007, Boeing executives boldly predicted Wednesday.
The company projected airliner deliveries will jump from 290 in 2005 to as many as 445 in 2007. Boeing revenues will climb from $54.8 billion last year to as much as $64.5 billion next year. And earnings per share will get a healthy bump from $3.20 in 2005 to as much as $4.30 a year in 2007, the company said in a Wednesday morning earnings call.
All those heady predictions came against a backdrop of a healthy year-end report from the Chicago-based company that provides 62,000 jobs in Washington. Virtually all of Boeing’s numbers rose in 2005:
Net income: Up 147 percent in the fourth quarter to $460 million. Full-year net income jumped 37 percent to $2.57 billion.
Earnings per share: Jumped 152 percent in the fourth quarter to 58 cents a share, and up 39 percent for the full year to $3.20 a share.
Operating cash flow: Increased 80 percent in the fourth quarter and 100 percent over the full year to a record $7 billion.
Net orders: 1,029, the company’s highest total ever for a year. The backlog of commercial airplane orders jumped 89 percent for the full year to $124 billion.
Operating margins: Climbed for both the defense and commercial airplane divisions in 2005. Operating margins in Boeing’s Integrated Defense Systems division were 11.4 percent compared to 8.9 percent in 2004. In the Seattle-based Commercial Airplanes Group, operating margins rose from 3.6 percent in 2004 to 6.3 percent in 2005.
Cash on hand: Climbed to $8.4 billion from $6.1 billion in the previous year.
Wall Street rewarded the company for its unexpectedly generous earnings.
Boeing stock closed Wednesday at $71.62 a share, up nearly 4.9 percent for the day on the New York Stock Exchange. The percentage increase was the best daily percentage jump in more than a year for Boeing.
“People are still kind of searching for stocks that may have been undiscovered and overlooked, and Boeing is one of them,” Mike Driscoll, a Bear Stearns trader, told Reuters News Service.
The company’s sterling financial report card and its optimistic predictions are a result of the company’s careful lean-years management coupled with shrewd marketing and product development moves.
The company’s new 787 Dreamliner, for instance, last year became the most popular Boeing jetliner ever, measured by precommercial service orders. Through the end of last year, Boeing had booked 379 orders and commitments for the fuel-efficient midsize plane that enters commercial service in the summer of 2008.
“Our results and improved outlook reflect a strong commitment to growth, expanding margins and improving how we do business every day,” said Boeing Chairman Jim McNerney.
The rosy financial numbers were even more remarkable because Boeing lost a full month of commercial airliner production in September when a Machinists union strike idled assembly lines.
While orders for commercial airplanes were up sharply, Boeing has managed to keep its aircraft production rates from outrunning its suppliers’ ability to provide critical parts for jetliners.
The company, while upping production rates to meet demand, has thus far resisted the temptation to make huge increases in the assembly-line pace.
Boeing, for instance, told airlines they’d have to wait a little longer to get the planes whose deliveries were delayed by the September strike – rather than scheduling huge amounts of overtime to put the production back on schedule.
In the mid-1990s, the company attempted to bump up production steeply to meet demand, with the result being planes that rolled out of its assembly halls without parts that Boeing suppliers had been unable to produce on an accelerated schedule.
Analysts, however, questioned whether Boeing could be missing business because it can’t deliver aircraft at the pace airlines want. Boeing’s production is sold out in 2006 and already 92 percent sold out for 2007, even with production rate jumps.
James Bell, chief financial officer, said the company was keeping a watchful eye on suppliers to ensure they and Boeing have their production plans coordinated. The company has signed long-term supply contracts, he said, for critical raw materials such as titanium, which is getting to be in short supply because of the aerospace order boom.
Isn't that something? And yet there are gloom-n-doom types here on FR who say American manufacturing is done for and that we'd better get used to flipping each others' hamburgers.
and have a tag plate on your car saying " If it ain't BOEING I ain't GOING " .
I guess jet locomotives didn't go over that well, huh.
Hi, Prophet, nice to hear from you! It looks like you resurrected this thread. Yes, looks like Boeing had a banner year on the commercial side! Thanks for the ping.
"American manufacturing"?
...Boeing already has approval to use airframe suppliers in Japan, Korea, France and Italy, it still needs a federal OK to share technology with a Chinese company tagged to build the 787 tail rudder. Boeing wants to use the supplier, based in Chengdu, to encourage airplane sales in China.Boeing is up to its wingtips in outsourcing to China. "American manufacturing" my ass.[...]
If Boeing fails to get an export license for Chengdu, it will have to build the 787 rudder elsewhere, perhaps in-house in its Frederickson plant in Pierce County or with a different supplier. As part of its scrutiny, the Commerce Department is examining Boeing's conduct in previous technology transfers to China.
[...]
Peter Lichtenbaum, acting undersecretary for Industry and Security in the Commerce Department, testified before a congressional commission that China poses a problem because of concerns about modernization of its military and the risk of using U.S. technology to do so.
Boeing last year announced deals with Chinese suppliers worth more than $600 million, including one with Chengdu Aircraft Industry, part of a state-owned aerospace group, to supply the 787 rudder. Chinese airlines subsequently ordered 60 of the new jets, the largest aggregate order to date.
The 787 rudder, like the rest of the airframe, is to be made from advanced carbon-fiber composite plastic. This material, while commonly used in military airplanes and missile applications, is increasingly used in commercial jets.
[...]
In his June testimony, Lichtenbaum mentioned the Chengdu company and its potential to produce "composite-based parts, components, and sections (e.g., rudders) for commercial aircraft."
He said applications to license composite materials "will be denied if there is sufficient information to indicate the items could be diverted to military end-users or third countries."
Boeing's past behavior is also under inspection. The State Department has already prepared charges that the company violated export-control law in the 2003 foreign sales of 737s containing a gyroscopic chip classified as a defense item.
And internal company documents obtained by The Seattle Times show that the Commerce Department is looking into whether Boeing has already provided restricted technology to Chengdu without an export license.
In addition, Commerce is examining whether Boeing has violated the terms of earlier export licenses for BHA Aero Composite Parts, a plant in Tianjin that opened in 2001, which is a joint venture with Hexcel and state-run China Aviation Industry. BHA produces about 200 parts for Boeing, including the 737 trailing edge, interior panels for the 777, and the wing-to-body fairing panels and tail cone for the 737.
Source Commerce officials visited Boeing's composite-manufacturing center in Frederickson near Tacoma in July to assess the 787 rudder manufacturing plan and had plans to travel to Chengdu and other Chinese facilities last month.
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