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.
If you want on or off my aerospace ping list, please contact me by Freep mail.
Prediction:
Airbus will have to start counting each plane ordered 3 times to claim the get more numbers each year.
Currently, the only count the same plane twice.
They'd better not be TOO successful or they'll be hauled before a congressional panel to explain themselves.
Perhaps we can get Boeing to manufacture our automobiles and trucks with the same quality as their planes. Then get their marketingand sales staff to sell them to the whole world.
Hmm? Boeing Motors Corp. Has a nice ring to it.
Or even Boeing Motor Works. Then they can abbreviate it B... aww shoot. Never mind!
ahh that mysterious "excess profits"....
seriously, it must be very galling to the Airbus people who predicted that a bigger-to-be-the-biggest a380 would put them on top.
Absent, some kind of major government subsidies and just outright giving the planes away for free (ala microsoft and their explorer program) for future parts sales, I don't see how they can survive.
actually imagine if GM goes bankrupt and Boeing just buys it and purges the union pork from it....
Whoa! I can dig it!
This is what is really smart, imo:
The company, while upping production rates to meet demand, has thus far resisted the temptation to make huge increases in the assembly-line pace.
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.
Keep it quiet, Boeing. Congress may call for investigations about your making record profits when the economy is going so well.
The Ford Trimotor: IT'S BACK!!!!
Isn't Daimler-Chrysler pretty heavily involved with Airbus?
Uh...we have our own pork - the IAM and SPEEA.
They tried manufacturing trains 20-30 years ago and got killed.
bump
(for those of us not in the industry) If that is military aircraft, the europeans have been pushing their eurofighter for some time now.
The EU has been trying to push emotional "buy eu" arguments for some time now. They are even doing their galileo GPS system with "must use eu sourced parts" rules.
Their model for airbus started as a "make work" project for the member nations. Boeing was started as a product based company.
That's funny. Here's some more good news:
http://www.boeing.com/commercial/news/2006/q1/060202e_nr.html
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